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LTC 184-2012 Budget Advisory Committee M A/01,B'­A0 2012 JUL 19 AM 11: 21 OFFICE OF THE CITY MANAGER a �� ICE NO. LTC #f 184 -20 LETTER TO COIN1V1�r§ N TO: Mayor Matti Herrera Bower and Members of the City Commission FROM: Kathie G. Brooks, Interim City Manager , DATE: July 18, 2012 SUBJECT Budget Advisory Committee "Draft" Recommendation Report on Pension Reform The purpose of this Letter to Commission (LTC) is to provide the Mayor and City Commission with a copy of the Budget Advisory Committee's Draft Recommendation Report on Pension Reform. By way of background, in early 2011, the Mayor approached the City's Budget Advisory Committee (BAC) and tasked them with a study of pension reform for the City's two (2) pension plans. The "Mayor's Charge" to the BAC was "to develop recommendations that address the benefits and funding concerns associated with the City's pension plans. While the BAC will examine all retirement benefits, the focus will be to address the Fire and Police pension system, as this plan has a significantly greater cost to the City than the General Employees' pension plan." More specifically, the requested deliverable work product was "to develop a series of written, implementable recommendations that address the long -term sustainability of the Fire and Police Pension Plan. An explanation of the recommendations, cost implications, impacts to the City and its employees, advantages, and disadvantages should be included. Recommendations may be split into short -term and long -term objectives. Subsequently, the BAC may provide additional recommendations regarding other pension benefits in the City." While the direction provided by the Mayor did not have specific dates, the desire was to have the Committee's recommendations finalized in time for the collective bargaining negotiations with the City's five (5) unions for the contract period October 1, 2012 through September 30, 2015. Attached, please find a copy of the BAC's "Draft" Recommendation Report on Pension Reform that was distributed at the July 17, 2012 BAC meeting. Please note, an earlier draft version of this report was distributed at the BAC meeting of April 24, 2012 but has since been updated. The- BAC is scheduled to present their final recommendations on pension reform to the Mayor at the July 31, 2012 Budget Advisory Committee meeting. In addition, a Commission Workshop on Pension Reform has, been scheduled for 4:00 p.m. on August 29, 2012, where the BAC will present their final Recommendations Report on Pension Reform to the Mayor and City Commission. If you have any questions, or need additional information, please feel free to contact me. KGB /CG z a a c ty o f a Y: g Rudg A v s s o � m m t�te e rY r F f� P ,y RN ; Recomm ®n P ension: R e o rm ......... . . 4 4 ; s - 3 E Y Ju 20 12 7 , i y l r° �N TABLE OF CONTENTS EXECUTIVE SUMMARY • Mayor's Charge • Recent Events Impacting Pension Plans • Summary of Recommended Pension Reform Policies and Guidelines • Pension Reform Options Evaluated (Summary Table) • Recommendations PART 1: 'BACKGROUND a. Mayor's Charge b. Approach c. Types of Pension Plans d. Overview of Miami Beach Pension Plans i. Recent Events Driving Pension Plan Costs — CMB Investment Returns and Salary Growth ii. Recent Changes in Investment Return Assumptions in Other Plans 1. California 2. Local Florida Government Pension Plans iii. CMB Historical Pension Costs and Unfunded Liability iv. CMB Budget Impacts PART 2: RECENT CHANGES TO PUBLIC PENSION PLANS a. 'City of Miami Beach b. Other Jurisdictions in Florida c. Other Jurisdictions Outside of Florida i. California ii. New York iii. Texas PART 3: CURRENT PLAN STATUS a. Fire and Police Pension Plan i. Overview of Current Benefits ii. Premium Taxes /Share Plans iii. Summary of Changes in Benefits iv. Plan Status V. Plan projections b. MBERP i. Overview of Current Benefits ii. Summary of Changes in Benefits iii. Plan Status iv. Plan Projections PART 4: RECOMMENDATIONS PART 5: FACTORS FOR CONSIDERATION a. Financial Affordability and Sustainability of the Plan vs. Providing Appropriate Benefits and Ensuring Competitiveness b. Unfunded Liability — No Instant Fix c. How Much Risk is the City Willing to Take? d. Legal Guidelines PART 6: RECOMMENDED POLICIES AND GUIDELINES _. __ ....._ .. Deleted: OVERVIEW OF OPTIONS EVALUATED¶ PART 7: OVERVIEW OF OPTIONS EVALUATED Deleted: RECOnnmENDATIONS APPENDICES • Detail of Actuarial Studies • Survey of Comparative Jurisdictions • Supporting Rationale and Data for Proposed Guidelines and Policy Statements • Presentations by City .Pension Counsel /Actuary and Pension Plan Administrators • History of Plan Benefits • Fire and Police Pension Plan - • Miami Beach Employees Retirement Plan REFERENCES • Presentations by City Pension Counsel /Actuary and Pension Plan Administrators • History of Plan Benefits GFOA Best Practices and Advisories Designing and Implementing Sustainable Pension Benefit Tiers (2011) 'Responsible Management and Design Practices for Defined Benefit Pension Plans (2010 Governance of Public Employee Post - Retirement Benefits Systems (2010) (CORBA) Sustainable Funding Practices for Defined Benefit Plans Developing a Policy for Retirement Plan Design Options (1999 2007) I { C( ORBA) • Florida Department of Management Services, Financial Rating oqf Local Government Defined Benefit Pension Plans January 25, 2012 • United State Government Accountability. Office (GAO) Report to Congressional Reguestors State and Government Local Pension Plans Economic Downturn Spurs Efforts to Address Costs and Sustainability, March 2012 • Center For State and Local Government Excellence, What are Hybrid Retirement Plans, A Quick Reference Guide, January 2011 • The Leroy Collins Institute (LCI) Report Card: Florida Municipal Pension Plans, 2011 US Postal Service Office of The Inspector General Report Of Pension Funding, June 2010 • United State Government Accountability Office (GAO) State and Local Government Retiree Benefits Current Funded St of Pension and Health Benefits. January 2008 EXECUTIVE SUMMARY RECOMMENDATIONS On April 17, 2012, the Budget Advisory Committee (BAC) approved a motion for Fire and Police Pension Plan ,reform combining a number of prior individual motions The combined motion Deleted pension includes the following motion and vote counts for pension reform for the F 11 and Police /Pensran Plan: R • Recommending that the City negotiate Options IIID2 for all new and nonvested Fire and -. _..._.- ....... _..... _ ....... . Police Pension Planpembers shown in the . table on the following page { Deleted employees _ ... _ . _ . _ _ - - - -- ...._ ... _ .. _ ........ __..._.. _ . Note: this portion of the motion was initially adopted as a separate motion by a; 7 2 ofe of the BAC. • Recommending that the City negotiate changes for vested Fire. and Police Pension Plan tnmbers to achieve thresholds in the policies and guadelanes adop tedbythe BAC ( see I Deleted: employees e - — Section 4 ent€tled Policies and Guideline); { Deleted on _ s Note: This portion of the motion was initially adopted as a separate motion byuranrm Deleted this - -- -- ..._.__.... —_ -- - ---- . ...... vote of the BAC. r� . 2 _R1 Wgl J _' 2 t ,,try $ - 2". l,/ iy Budget Advisory Committee Pension Reform Report — Executive Summary Page i HYBRID OPTION IIID2 FOR NEW AND NON - VESTED EMPLOYEES Provide a define . .. equal the minimum benefits to receive Premium Taxes from the State as deftn @d rby FS Plan will be frozen Chapterl75 /185 and a defined contribution component of 1 1 percent funded by the Crt (w th employees providing a matching 5% contribution). 3 . 3 Multiplier ; 2% � sr Final Average Monthly Earnings (FAME) Calc in years Highest 5 oflast 10 "✓ Retiree COLA* Normal Retirement Age 55&10 arS2 &25 % Employee`Contribution to DB ** 5 009 r ,'•.., d . % Employee Contribution to DC 5 00% ; % City Contribution to Social Security % City Contribution to DC 1 1,1100% Share Plan DC (See Note Below) Y @s x 4 Social Security •, �� 75% Joint & Survivor with Beneficiaries • 120 months guaranteed *Provided that the Ctty Gommtsston.inay periodically adjust the CC7LA�up to l .5% compounded for a given year =,oriel COLA reset§ %to 0 - - - the following yearltunless the City Commission afFirmattvely vote's'to increase above'0 °l fatfienext fiscal year ` * This represents a minimum consistent Ith F Si75 /185 but the defined benefit employee contributiori be set at any level Note, Premium tax revenues for Fire and Police' P,ons are . expected to continue. N This resuits % reduchon,of pension benefits as a percentage of payroll to 21 % over 30 years and a net present value (N -V) savings of $74 million over'30 years. In addition, year 1 savings are estimated at $2.5 mtlhon s While the savings can be achieved by other the reduction of risk through o hybrid plan is the key benefit to the City. The`Citywill retain'risk on the defined benefit portion of the pension; however the. Ci_ty, will have no risk on-the d'e"fined contribution portion. In this regard, the City's risk is reduced by 40 -50 percent. Tle`'employees will have a new risk associated with the defined contribution portion of this plan; however, (1) this is a risk of investment that a majority of Deleted s Budget Advisory Committee Pension Reform Report — Executive Summary Page ii the public faces (i.e., nearly all private sector employees have defined contribution plans), and (2) along with the risk comes the reward as well to the extent that the employee invests wisely. The reward potential of a defined contribution plan exceeds the reward potential. under the current . defined benefit plan. , MAYOR'S CHARGE r fj aa F T a In early 2011, the Mayor approached the City's Budget Advisory Committee (BAC) regarding �;, undertaking a study of pension reform for the City's pension plans. The "Mayor's Charge to the BAC was: ra ... to develop recommendations that address the benefits and :funding "cone ns associated with the City's pension plans. While the BAC will examine all rehremenfi >� benefits, the focus will be to address the Fire and Police pension 'system as this plan as""'9N- N�� 7 significantly greater cost to the City than the General Empfoyees';pensiooplan." More specifically, the requested deliverable work product was "to develop`asertes o f written, implementable recommendations that address the long term sustainabilityafthe Ftre and Police Pension Plan. An explanation of the recommendations, cost tmpbcahons, impacts to theCttyarid its employees, advantages, and disadvantages should be included. Recommendattonsffmay be split into short-term and longterm objectives. Subsejuentlyfhe BAG may provide additional recommendations regarding other pension benefits m the City. " While the direction provided by the Mayor did;not%aYe specific dates, JA irewas to have the Committee's recommendations finalized m hme_for the;collective bargain n" gotiations with the City's five unions for the contract period October 1, 201,2 through September 30, 2015. Initial discussions centered on a desired goal of January 2012 for prelimi nary .recommendations. & RECENT EVENTS IMPACTING PENSION PLANS Key events impacting th'e financial sustainabifity of City defined Benefit plans have been salary growth in excess ofias' bel 'sumptions and investment return ow assumed rates, due to one of the worst decades of investment retums in the United States. Also we have also reached and surpassed an inflection point n h where the number FIreand Police retirees increastflgly exceeds the number of employees. f Both plans demonstrate strongiinvestment returns well>in excess of assumed rates, prior to 2001. Howeyer,_ rates of return post 2001, and parftc lady since 2008, have been below assumed rates, thereby helping dnve' increases °in unfunded °liabilities and annual contribution requirements over that time period.` Further, while_MBERP salary growth has generally been in line with the assumed salary growth' rate, Fire and Police Plan salary growth has almost consistently exceeded salary growth assumptions for the base plan, especially considering the fact that the salary basis for retirement Budget Advisory Committee Pension Reform Report— Executive Summary Page iii . benefits is the average of the last two years' salary, including incentive pays, longevity pays and approximately 1 T percent of'overtime that can be counted as pensionable pay. hil ... y u ,: SUMMARY OF RECOMMENDED PENSION REFORM POLICIES AND GUIDELINES r As part of the evaluation for Pension Reform in the City of Miami Beach, the Budget Advisory; Committee (BAC), is recommending policies for long -term pension reform The BAC`° is also recommending guidelines for the City to adopt which establish thresholds which�f surpassed will require the City to take prompt and appropriate measures to meet the guideline cn eria ;n The policies and guidelines address four perspectives: (1) Affordability and, iy(2), Appropriate Benefits to Provide to Employees, (3) Recruitment and Retention, Management of Risk /Risk Sharing. J ' These policies and guidelines were adopted unanimously by the- M'_ BAC Affordability and Sustainability Wk, GUIDELINE STATEMENT: If the City's portion of the total annual of retirernent contribution exceeds 25 percent of payroll for ;gen era l employees and 60 percent of payroll for high risk employees, the City should p'r'eview and eve l WW" potenhal:changes to the collective bargaining agreements '.between the City and;the Unions; applicable towards the next contract negotiations, m orderlo identify potential approaches to reduce the contributions to these levels over the16ng term ;rte t • POLICY STATEMENT The City shall fund " t" the normal cost of pension. If this _ exceeds the amount of the actuanally determined annual'.required contribution, the excess should be placed in o pension:stabilizahon fund to to made available for future pension shortfalls. . • POLICYj STATEMENT: The City shouldsstnve to maintain a funded ratio of at least 80 _: percent foraeach of its defined benefit pension plans. • GUIDELINE ` STATEMENT: If the funded; ratio :(actuarial value of assets minus actuarial ., liabilities) of either of the City of Miami ,Beach `s pension plans falls below.70 percent, the r`r3e to im plement opproaches�to increase the funded ratio to that level over City should st five (5) years. W • POLICY STATEMENT: Salary growth should not exceed the average actuarially assumed salary growth in each of the City s pension plans. Budget Advisory Committee Pension Reform Report — Executive Summary Page iv • POLICY STATEMENT: The City should require 5 10 and 20 projections of required pension contributions as part of the annual actuarial valuations for each i6f the City's pension plans. These projections shall be based on the current actuarial assyptions far2 each plan. The projections shall be updated to reflect the cost of any proposed benefit = enhancement before the City Commission agrees to the enhancement:,. The cost of these' studies shall be funded separately from the annual contribution to the pension plcin • POLICY STATEMENT: There shall be an experience study of each of the City'§ pension plan's actuarial assumptions performed by an actuary that tsp q epende t from the sr pension board. The experience study should be conducted at feast Wn e eery three (3) years, to compare actual experience to the assumptions. The indepeni etlt octuca,ry shall ... make recommendations for any changes in assumptions based on fhe results of,,the experience study, and any deviations from those assumptions by the pension board shall be justified to the City Commission. i • POLICY STATEMENT: Once pension reform is implemented, q 5/7� =vote of the City Commission should be required for any further pen sion,ehanges: Appropriate Benefits to Provide to Employees , • POLICY- STATEMENT: The City of. Miami Beach should stave}o provi de a retirement benefit that provides for , a replacement of salary at a level at�least3equiva b ifvfo Social Security plus a supplemental retirement b e • POLICY STATEMENT: The City of Miami Beach retirement benefiis "' uId be adjusted periodically after retirement to reflect tfe impacts of inflation, with rates no more than the Consumer Price Index for All Workers Cf?I;(W} that is subject to City Commission approval and with a maxtmum:of 3 percent annually Al ' tr Recruitment andRete`nt�on °~ PC�,LICY STATEMENT: The City of Mi K b fa should strive to provide retirement benefits • that ensure that the City is competitive in the recruitment and retention of employees. _ Management ofRr k /Risk ; Sharing • POLICY STATEMENT The City of Miami °$each should strive to share some portion of retirement benefit nsk"with employees �:' } • GUIDELINE STATEMENT If fheCity's contribution to a defined pension benefit plan exceeds 25 percent of payroll for general employees and 60 percent of payroll for fiig risk employees, the employee contribution should be reviewed. _ Budget Advisory Committee Pension Reform Report — Executive Summary Page v CL { - .. \ � 10 61 g ' ° 2_ ...... _.. 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N OU U Loi N w �1Im >; Z E U T _ - O N Uo m NOTES ON RECOMMENDATION AND REASONS FOR NOT RECOMMENDING OTHER OPTIONS OPTION I: Florida Retirement System (FRS) - The FRS was not recommended because th 'et pity's� loss c k � of control of expenses to Tallahassee, ongoing litigation regarding FRS pension changes implemented in 2011, news of projected shortfalls and payment increases and loss of the premium insurance payments. `s OPTION II: Defined contribution similar to FRS, including a Social Secun equfvaI nt Although Chic k option eliminates risk, it was not recommended because of concerns with�savmgs potential given the relative) earl a ges for retirement eligibility the im act on morale for existing non vested em to Y Y g P 9 , ploy re` "employ and the potential that this may prove to be unattractive to recruit police and fi s in the future... OPTION Ill: Hybrid Plans — We recommend the City adopt a hybrid plan approach in Option IIID2X and do not recommend the other hybrid plans because although they reduced'the�,nsk to the City, they . did not generate the NPV savings of Option IIID2. r e r�? OPTION IV: Changes to the Existing Pension Plan'— Past Service, /Future Service Approach with a combined benefit). Changes to the existing pension plan areommnded m regards to vested re "ce employees in order to meet the Policies and Guidelines idenhhed rnSection Kowever they ur:`e not recommended for non - vested and new hire employees because al #hough theyacan generate the NPV savings, they do not reduce the City's risk, and risk reduction was akey� factor rn tfae BAC's recommendation. r a z i x F 9 4} Y , a 'a :.� g. :fib a U, Budget Advisory Committee Pension Reform Report Executive Summary Page xi 1. BACKGROUND MAYOR'S CHARGE' . NN In early 2011 the Mayor approached the City's Budget Advisory Committee (BAC) reggrdincl undertaking a study of pension reform for the City's pension plans The 'lV�ayor''s Charge' to the BAC was: , y .. "... to develop recommendations that address the benefits,;gnd fundrng concerns - associated with the City's pensiont plans. While the BAC will all retirement r benefits, the focus will be to address the Fire and Police pension system asthis plan has a significantly greater cost to the City than the General Employees pension plgn " More specifically, the requested deliverable work product was to develop a seri es of ^- written, implementable recommendations that address the long -term sustainability of the Fire and Pohce:j ` Y Pension Plan. An explanation of the recommendations, cost impIicaons� �rrt gs to the City and its employees, advantages, and disadvantages, should be mcludedRecommendafions may be -split, into short -term and long -term objectives. Subsequently, �t[ae =BAC moy2p itional recommendations regarding other pension benefits in the 1 }& While the direction provided by the Mayor did not have specEfi c elates 'fiheRdesire was to h &ve the Committee's recommendations finalized in time for the=collective bargaining,negotiatI ,tas with the , City's five unions for the contract period October r1`_2012 through Septembe €:30, 2015: Initial discussions centered' on a desired goal of January 20124or preliminary rec,msnendgtions. APPROACH A To accomplish this objective the BAC developed an approach that included the following . components • Develop anv grston`cling of tie City's current pension -plans 5 benefits and costs for the Fire and Police' Pension Plan ~sand fhe,= Miami Beach - Er€aployees' Retirement Plan (for Gen6r,61 e ployees) from the pe' sr peetiye ,[ counsel, the City's actuary, the City Manager and the pension plan administrator for each of the City's pension plans (the Fire andlPolice ,, Pension Plan and the Miami Beach Employees' Retirement Plan - MBERP). • SoII cit inp f from the City's collective bargaining groups and employees. • . Survey`comparghve jurisdictions in the region regarding pension plan costs and benefits. • Develop draft pol ere and guidelines'to guide management of the City's pension plans into the future, =(n c y of which is attai* -,for your review). • Identify and review options of potenho, ch "anges to the Fire and Police Pension Plan based on 6 major categories, -- namely o Florida Retirement Systernn (FRS) o Defined Benefit similar to FRS, including a Social Security equivalent o Hybrid Plans with both, a defined benefit and a defined contribution component- Budget Advisory Committee Pension Reform :Report Page 1 • Changes to the existing plan with a combination of past service benefits and benefits earned prospectively; • Freezing the existing plan and defining new benefits based on F {o�daS tatute Chapter 175 and 185 minimum benefits to continue receiving premium • Changes to the existing plan to reflect the savings associated with plan elanges included in the 2010 collective bargaining agreements, vtth''' the International Federation of Fire Fighters (IAFF) and the Fraternal Order of ={'olice (FOP) that have not yet been implemented by the Fire and Police Pensio63Board r, acts of potential op tions p P P Al • Evaluate the cost imp acts • Develop Recommendations ln, ... , f TYPES OF PENSION PLANS A retirement benefit is a form of deferred compensation designed to assist the employer tnthe recruitment and retention of public employees and other workforce management "goals. It is also > '" provided to assist employees in preparing for retirement and y ta compensate mdtvduals for their -3 years in public service. Broadly speaking, there are two types oretiremert pfans , defined benefit and (2) defined contribution. Defined Benefit Plans 9 With very few exceptions, defined benefit plans provide a retirement hat is calculated using a formula based upon a plan participant s years of service and °compenso' 66h Generally, both employers and participants contribute to fiftese public sector defined bef; Ions. All assets accumulated to fund the retirement benefitss a "re tnvestecf�by the retirement board or by a central agency responsible for investing government funds ACmv�tment- related risk is generally borne. by the employer. These plans are predominant mthepubhc sector, and based upon the Department of Labor, Bureau of labor Statistics 1988'data,0percent of full -time public sector employees receive dehried�beheftts� Principal featuresof defined benefit plans generally Include: 1 Investment risk born by the plan sponsor �A 2 Life expectancy risk born by the plan sponsor; 3. Sirvior ariddtsability coverage generally provided; A. Guarcirtteeef,l11 11 annuity to members at retirement unless they choose an alternate paymetmethod� 5. Investments drrecfed�by the plan 6. Generally lower mvestment�costs associated with a defined benefit plan as compared to other plan designs, 7. More useful tool for employers to attract and retain employees for full careers and to manage workforce levels; and Budget Advisory Committee Pension Reform Report Page 2 8. Guaranteed or ad -hoc cost -of- living adjustments may be provided to annuitants. Defined Contribution Plans Defined contribution plans provide benefits based solely on the assets av'ilable an employee's individual account, to which both employees and employers may contribute All employees hpve? their own accounts set up within the plan to which contributions and investment gams ard_ losses are recorded. Typically, under a defined contribution plan, employees direct the investment of their contributions among investment options selected by plan trustees, the employer or the employer's designated agent, and therefore, fully bear the investment risk T 17.1"1111 unt accumulated in a defined contribution plan will vary depending upon the omouht contributed - to the plan, the investment performance, the level of risk taken and the fees paid '.° Principal features of defined contribution plans generally include:' 1. Portable vested benefits; 2. Employer obligations fulfilled annually as contributions are made, =so ;there is no unfunded liability;' 3. Investments directed by participants; 'y " 4- Account balances at retirement dependent upon a combination of investment rate of return, contribution levels and the'period ofiirivestment, 5. Easier to understand account values as paw icipants can see r, JJ balance on a regular basis; s 6. 'Investment risk and fees born by parnq!pan} 7. Life expectancy risk born b the artici an# P Y Y P p 8. No cost of living allowances after rehrement; however, participants continue to earn investment income d n fheir`remainmg assets; and 9. Neither coverage gene,;�ally provided. In addition, to defined benefit and defined con "tribution plans,.some"entities provide retirement benefits through" hybrid plans" that icorparate" features of" botli "defined benefit and defined contribution plans," thereby reducing (although nit eliminating) the risks to the plan sponsor. g W For any of these plans, the actual costs to plan;,sponsors and participants are determined by the number and dmount of benefits actually paid to recipients, and the source and amount of plan contributions and investment returns. T> Source: GFOA Best Prachces - `and Advisories, DeJeloping a Policy for Retirement Plan Design Options (1999, 2007) (CORBA) Source: Florida Pensions Vol ume 1, Issue 1 2012. E� Budget Advisory Committee Pension Reform Report Page 3 Actuarial Valuation Reports Independent actuarial reports are used to determine contribution requirements to a defrned benefit plan by the plan sponsor, in accordance with Florida State Statutes. The valuation reports based on various assumptions established by each pension plan Board in,�consultation x wrth the ' pension plan Actuary and Investment Consultant. These. assumptions include current wage data mortality rates, retirement ages, future salary increases, pension planvexpenses and nvestrnent performance assumptions. . M W The actuarial valuation of the pension plan is a mathematical determination- ofpthe financial„ condition of the plan, which includes the computation of the present monetary "value of_beriefits payable to present members, and the present monetary value of future emp pnci contributions, considering the expected mortality rates among employees antl' retrrees, ;rates of , disability, retirement age, withdrawal from service, salary increases investment earnings value of assets. In contrast to the market value of the pension plan assets,�4he actuarial value the pension plan assets is equal to the market value of the assets at a specific data adjusted to reflect a five-year phase -in (or smoothing) of any asset experrenee, gam or "(oss The 5 -year smoothing of pension plan asset value means that only 20 of the experience, gam or loss that the fund experiences in any one year is recognized immediate~lys for the purpose o defermmrng the actuarial value of the plan and the annual required contnbution� The market value of the plan is the total value of all ' 6n investments as of a given paint in time based on current market value on that date. Both the a }uarial and market valuaf the pension plan assets are important indicators of the plpn's condition.Usrng� theactuarial value methodology allows the pension plan to sprea�dithe annual plan experience. a period of time V O W", (5 years). By doing this, the short -term swings of the market, economic upswings or downturns, or other near -term factors can be softened over time Tfe market value methodology for pension plan assets gives a point-in-time assessment of the plan Bassets without any smoothing. This approach typically results rn more volatility rn the plariasses�a's�any short -term experience affects the plan immediately r As part of the annual actuarial valuati n for etch plan based on plan data as of October 1, the Actuary evaluates {V &r the actual data for the preceding year compared to the actuarial valuation for that year. Any' diffe nces are reflected as actu aii6l Barns or losse ;. The unfunded liability for a plan is ii Deleted: in unfunded liability l the difference befween the value of benefits earned (accrued) and projected future benefits, and the assets of the F lan one agiven date; and is typrcctlly amortized and funded over 30 years. The "., amortization methodolagy vanes by plan. s Actuarial Accrued Liabr61Y The actuarial accrued liabrhty snapshot at a point in time based on plan benefits and assumptions. For example, the actuary estimates when members of the plan will retire, how much they will get paid over their remaining lifetime once retired, and how long they will live, in order Budget Advisory Committee Pension Reform Report Page 4 to calculate the total amount that will be paid in the future for plan members. The total value of these benefits is then "present valued" to current dollars. As a result, the investment rate of return is significant as this affects the calculation o_f. present' "; value of the plan benefits, i.e. how much the plan should have on hand today which ;togetf er''; with investment earnings (the investment rate of return), should be sufficient to�fund the plan m the' future. q W Each year, experience "gains" in the prior year reduces the actuarial 91 Ilability.,- Examples of experience gains would be investment earnings for the prior year m %excess of plan ��' y assumptions, employees retiring later than assumed, salary growth less than assumed, etc.` Experience "losses" for the prior year, conversely, increase the actuarial accrued lability Changes to plan benefits can also affect the actuarial accrued liability of a plan, either postfively; or negatively. If plan benefits are increased, the mathematical calculgfforts will result to more I ... . __...... _ benefits anticipated to be paid to plan members in the future which must �e recognized at the Deleted: will need time of the increase although payments would be amortized over the longterm Conversely, if Deleted: to Ian benefits are reduced, all else being e qual, the Ian will see`` "a reductlon Je the actuarial r._ - - - - P 9 q P aj Deleted: all of once accrued liability. ' Rate of Return of Investments and Asset Value' Al 3y The annual plan valuation is based on actuarial value - a assets ratherytktan market value. As noted earlier, actuarial value uses a 5 -year smaothtng approach. The tntenfi a� the sm is to mitigate the impact of significant annual changestn actupl investment returns `'- Dele over m r a Dele If o time there are significant, t persistent market values in excess of actuarial Unfunded ActuariiaLAccrued ; a _Mt '. value, the plan may elect to "Fresh start' or z partial fresh start" to recognize some of these of the plonas the acfuana The unfunded liability l accrued IiabiIiV,less the actuarial value of plan assets. gains and reduce the actuarial accrued liability. ' ued ability. ' This amount is .ex pected "to have yea .6 ey_ar fluctuations howevey,, if the plan's assumptions are ¶ -- - ------ - - - - -- - -- - -- - - -- -- - -- - 1 consistent with the plans long -term experience the changes to the unfunded liability should be offsetting I Deleted: year by year over the life,' ofahe plan. �� The percent of the cid arial accrued liability funded f (funded ratio) is a measure of a pension fund's fiscal health It =:compares assets to pension obligaflons A percentage over 100% means the fund has more money than it needs�to� meet its obligatlorrsYat that point in time. A funded ration of 80% or greater_ (actuarial value ;ofassets'. dtvtd accrued liability) is_generally considered a sign of an, adequotely funded plan , E'" WA Budget Advisory Committee Pension Reform Report Page 5 } OVERVIEW OF MIAMI BEACH PENSION PLANS The Fire and Police Pension Plan provides defined pension benefits to police officers and fire ,- fighters, while the MBERP provides defined pension benefits for almost all other fullhme ,,, employees. Approximately 50 current employees participate in a defined contribution 401PIan that is no longer offered to new employees. - Deleted: which J The Fire and Police Pension Fund was formerly known as the City Pension Fund for Firemen a'nd`,� Policemen — City of Miami Beach and City Supplemental Pension Fund for Flre Flghters and Police Officers— City of Miami Beach. The former plans were merged and the name changed to City Pension fund for Fire Fighters and Police Officers in the City of Miami Beach The'deftned, benefit plan covers substantially all police officers and firefighters of the City of Mi�� Bach y w The earliest origin of a retirement program for the City of Miami Beach was the Retirement System for General Employees created under and by authority of Chapter 18691, Laws of Florida Acfis ,, ,, in 1937. The Retirement System for Unclassified Employees andlected Offtctals was created'in 1988. In March 2006, the Retirement System for General Employees and fihe Retirement System j Deleted: 2006 for Unclassified Employees and Elected Officials merged to rm the Miamth ecich Employees' Retirement Plan (Ord. 2006 - 3530. 5 AN ff RECENT EVENTS DRIVING PENSION PLAN COSTS �"CMB IN STMENT RETURNS AND SALARY GROWTH y` r In the Fire and Police Pension Plan, key drivers cFthe regent increases in unfunded Ittlity have been salary growth in excess of assumptions and investme' nt returns below assumed ratestfue to one of the worst decades of investment returns . in _recent fiis, tom, Also we have also reached and surpassed an i Deleted: in the united states inflection point where the number of Fire and Police"re lrees,exceeds the number of active employees. Deleted: increasin F -% The following table�sjan�d graphs efle�ctthe assumed 6 nd 1 fuatl1rate of return for each of the two plans as well s�#tie assu ed and ac tua lary growth for;ea h aVthe two plans. In any year where the actuarlaf rate'of return exceeded the "assumed rate ofreturn for the plan year, this 0 would have resufted. o decrease .m the actuarial accrued 'liability, all else being equal. Converse ly,'in any y where the actual rate, of return was less than th e assumed rate of return Deleted: actuarial for the plan 'this mould have resulted in an 166re56sekin the actuarial accrued liability, all else being equal Both plans demonstrated str ong investment returns welt in excess of assumed rates, prior to 2001. However, rates of �etuie . 200,1, and pat'hcularly since 2008, have been below assumed_ rates, thereby helpings todrtve increases "an `unfunded liabilities and annual contribution requirements over that time period Further,:vrhile MBERP salary growth has generally been in line with the assumed salary growth rate -`Fire and Police Plan salary growth has almost consistently exceeded salary growth's " 4ions for the base plan, especially considering the fact that the salary basis for retirement benefits is the average of the last two years' salary, including Budget Advisory Committee Pension Reform Report Page 6 incentive pays, longevity pays and approximately 11% of overtime that can be counted as pensionable pay. Fire and Police Pension Plan. Fire & Police Pension Plan Historical Return and Salary" - Growth, , a BASE PLAN SUPPLEMENTAL PLAN INVESTMENT SALARY INVESTMENTS SALARY RETURN INCREASES RETURN r [NCREASES Year Ending Actual Assumed Actual Assumed Actual Assumed Actual Assumed - 09/30/1990 _ -0.51% 8.50% 3.30% 6.00% 13.14% 8.50% 09/30/1,991 16.67% 8.50% 2.30% 6.00% 13.17% 8.50% 2:40 ° / 6:00% O T , u> 09/30/1992 _10.28 % 8.50% 3.20% 5.20% 10.46% 8 50% 3.30% 09/30/1993 12.82% 8.50% 6.30% 5.20% 13.42% 8 50 %a 6:40% 5.20% 09/30/1994 _0.84% 8.50% 5.30% 5.20% 0.74% , 8 5Q% 5 30% . 5.20% 09/30/1995 17.35% 8.50% 7.80% 5.20% 29 2 1 8 5 % 8 20 5.20% 09/30/1996 _13.58% 8.50% 8.00% 5.20% 11. .; 8.50%' $ 00% 5 -20% 09/30/1997 20.97% 8.50% 7.60% 5.20 26 40% k 8 50% 7 7096 5 20%" 09/30/1998 _8.32% 8.50% 9.54% 5.20% ag �� g.w . 09/30/1999 _11.73% 8.50% 6.57% 5.20% ! _ F > � 09/30/2000 _10.52% 8.50% 2.74% 5,20%` 09/30/2001 -8.79% 8.50% 4.00% 5. 20% 09/30/2002 - 1:65% 8.50% 8.58% 09/30/2003 _15.05% 8.50% 6.88% 4 82 09/30/2004 _9.72% 8.50% 09/30/2005 _9.99% 8.50% 4 09/30/2006 8.28% 8.50% 7.87% 4 80 %a 09/30/2007 14.31% , 8 50% 9.48% 09/30/2008 10 4310 8 SQ% 8`77% 4 9k 09/30/2009 135 %8 CEO% 793% 4.40% 09/30/2010 10 85 8.30% , Z 71% ,3.83% The assumed salary scale from 1992 through.201Q (is graded salary scale IN- J d ti -- Budget Advisory Committee Pension Reform, Report Page 7 Investment Return 30.00% - T - . . ........ . EM BASE PLAN 25.00% — - - - - - 5 20.00% 15.00% M SUPPLEMENTAL PLAN L y 10.00% " po, 0fijdnt1l- Plan ';.:", .... ..... 5.00% —Su 0.00% A C � , ifi --\\\\\\\\ — ss u .00% Re t urn — - - - ---------- - - 0 C, 00 - -- - - - - - - - - -10.00% Bas, I - - - - - - - - - - nv en: -15.00% r 0 0 CD 0 C) C, C, 0 0 a 0 0 0 -20.00% — --------- VS- -- -------- - - ------------------- . . ....... . ....... . . . ............... ... . ... . ...... . .. Deleted: if ....... . ... . . . . . ............ Actual Salary Increases 10.00% 9.00% 8.00% j� B ASE 7.00% + . ... .... ,P 6.00% g 7; ? 5.00% M=SUPPLEMENTAL #LAN . 4.00% 3 , 2:,. -Su .. Pplemental Pla 71 Assumed Salary Growth — Base Plan Assumed 51 2 2 -,: .- 1 Salary Growth , 2,; T "M M Flit" o Y t R TREND ACTIVE VS. INACTIVE "' N • ! 2007 2008 LICE PL BERs"S 2010 2011 Active _ Mem bers 487 468 457 Retirees _ .......... . . ..... 493 506 505 524 Beneficiaries Disabled Members 6 2 !k 0 62 59 56 " DROP Members 48:, 66 67 66 Vested or 13 15 Total 1071 Vested, 17 12 Dormant 11,63 1124 1 1 12 1118 Budget Advisory Committee Pension Reform Report Page 8 Miami Beach Employees Retirement Plan Miami Beach Employees Retirement Plan (MBERP) _......:... ......._._ _.._.. History of Investment Returns and Salary Incre ases General Plan Unclassifted'Plan BASE PLAN SUPPLEMENTAL PLAN INVESTMENTRETURN SALARY INCREASES INVESTMENT RETURN SALARY INCREASES g Year Ending Actual Assumed Actual Assumed Actual Assumed Actual Assumed 09/30/1990' 7.3% i 8.5% 7.S% 6 0 2.3% 1 8 0�a 12 3% 6.0% � - - 09/30/1991 8.1% 8 5% 3 0% 6.0% 216% .. 8.590 34 °/a 6.0% _..._.. o _. 0 . I _ 09/30/1992 13.7/ 8 5/ 2 0% 6 0% 5.8% 9 _ _._ w... _ 8 _._ 09/30/1993 11.4/ 8 5/ 3 1% 6 0% 14 1% j 9.0% 0 0 09/30/1994 - 6.8% 1 8.S% 3.9% 6.0% 09/30/1995 11.4% 2 8.5% 8.8% 6.0% 24.i% 9. 0%. 09/30/19 96 15 -3% 8 S/o 4 2/0 ; 6.0% 13.9% __.. 09/30/1997. 13.8/0 8 5/0 6 0% 60'/0 19 _. _ ._. _ _. 09/30/1998 12.5% 8 5% 5 0% 6 0% 4 3 %' -" 9.Q• 41% 6 0% _. _... 09/30/1999 14.4% 8.5% 7 3% 6.0% 18 8o /a 9.0'/= t 71% ,6 0' /0 -_ _ _ _ 09/30/2000 10.7% 8.5% 6.7% 6.0% 64'/0 - 09/30/2001 7.2% 8.5% 9.3% , 6.0% 9 7% 9 0'® 7 0 °1a 6 4% _09/30/2002_ 0 3 /o 8.5% ._ ... 8.9% 6 0•/ .... 177 }0` 9rd% 09/30/2003 4.3% 8.5% 8.1% 6.13W- 46 %' ¢ 0'/0 7 5% 6 0% . ..... . 09/30/2004 4.1% 8 5% 3.1% 60'/0 9.7% 9:OS6 5 7% 60'/0 09/30/2005 4.4% 8.5% 4.7% 6 035 10.7% 9. �6 $'/ ( '6 0% 09/30/2006 7.7% 8.S% 11 .9% 6 0% 10. ( 8 75% 7 9% 6 Oo/ 9/30/2007 ** 12.0% 8 75% 3 6% G D% NA NA ' ,3NA NA ... 9/30/2008 ** 5.2/0 865/ 113% 60o/a NA NA NA NA 9/30/2009 ** 1.1% 850% 4.8% - - _ t-l ' 6 0% NA NA NA NA 9/30/2010 ** 5.0 8.35% 23% 6.0% ., NA NA NA NA ��..,.. g _ 1 � Actual-lnvestment Retu 25. - - - -- - - -- - -- - C 20 0 s� ' ! General Plan 100 %':` - -- EM Unclassified Plan 5.0 0.0% Unclassified Assumed 5:0 %n Salary � `' "' - O \ � e \ � 1 01\ O \ � \ O� \ � O� \ � O\ \30 \y - Gener al Plan Assumed Salary a ry ** Represents Investment Return fortfie total group Budget Advisory Committee Pension Reform Report Page 9 Actual Salary Increases�x 15.0% 4 .s 10.0% i_, __ .......... _....----- ._._._:..__.. .. --- -..:_. _ _.__.- General Plan d mg f a 5.0% EN Unclass f ed Pfan � E'� � 4 0.0% W �� m d' in W t\ W m 0 .--I N m V V1 l° • * + - '�' mrnmmmmmmmm000oo0.0 + . — •UnclasSifiedA� med GIL7lmrnmmmrnmm Q_Orv°omo 5.0� i N N N N N N N N N N N O o o r-1 - 0 000 Salary 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o N ry ry ry r mmmmmmmmmr+•mmmmmmmm_� + = §z� ---------��0 0 0 0 — General Ian Assumed 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Salary "Represents Salary Increases for the total group Nf MBERP MEMBERS_5 TREtdD VS _INA , 2006 2007 200$ 2009,., Active Members 1018 1061 115 9 Retirees & Beneficiaries 950 959 968 1 972' X 981 Disabled 40 Members 454 4_2 4 DROP Members N jA IVJA NJA �` 49 Vested or.ni.- 64 70 79 75 X87 Dormant Total 2077 2132 >225'6 2281 2262 - In 2011, the Florida fegisldturemandated that the Florida Department of Management Services develop a plan to crea #eta �atmg system for use.in classifXg, t6` financial strength of all local government pensib plans. As part�of the recommendations - `contained in the report, the Department recommended the following percentage point system components (in conjunction with other components totaling to 100 percent) to',e�a)uate, the financial sustainability of a plan, for each com ponent a ratio by comparing the 5 year average of actual experience to the plan assunipfegn thereby emphasizing the importance of these assumptions. Rate of Return Ratio ;F Growth Ratio ,ALT 1.0 5% 0.754„ 099 3% 1.01 — 1.33 3% 0.54 - 074 „'_ 1% `” 1.34 =1.66 1% LT 0.50 "'' Ot /c GT 1.67 0% Budget Advisory Committee Pension-Reform Report Page 10 RECENT CHANGES IN INVESTMENT RETURN ASSUMPTIONS IN OTHER PLANS Investment rates of return for the past decade have been essentially flat, resulting rn the'f - examination of the assumed rate of return for defined benefit pension plans, across several= pension plans. The rate of return adopted and assumed by a pension board crttical�F component to the actuarial calculations of payments and liabilities. If the assumed rate is higher than the actual rate, then the plan will require additional funds and thedi' bilrly will increase The' & "T" rate of return-adopted by the city's plans as of the 10/1/10 valuation 'eports were 8 2 percent for the fire and Police Pension Plan and 8.25 percent for MBERP._� E California (CaIPERS) The California Public Employees' Retirement System (CaIPERS) manages r" tr ent benefits or more than 1.6 million California public employees, retirees, and their families. As of1u e` 30, 2011, CaIPERS provided pension benefits to 1,103,426 active-,, and inacti e erst d, 536,234 retirees, beneficiaries, and survivors. CaIPERS membership is divided approximately rn thirds among current and retired employees of the state, _schools ond" "parficrpa,ting public agencies. CaIPERS is a defined benefit retirement plan. It provides benefits based =on a member's years, of service, age, and highest average compensation In addition, benefits areprovided for . disability and death, with payments in some cases going to suiYrvors oe, beneficiar!pA, q!iiq ligible ,q members. Approximately half of their members pay into Soaa) Security CaIPERS manages health benefits for more than 1.3 million members and their families ' In March 2012, the Staff administration recommended a reduce the d scounfi race for CaIPERS from 7.75 percent to 7.5 percent, even thoy9 this is projected to require an additional $303 million per year in pension fund contributions Source: CaIPERS r� Local FloridaGovernmerit Penss�on Plans; , The Florida Division of Retirement, a Division of =the Florida Department of Management Services, is responsibl6- AW " and commenfing;,`,,,bn vf actuarial valuations, impact statements and reports strbmiffed by local governments, special districts and schools boards, as well as, determinm if actuarial re orts are timely, late rid accura and are based on reasonable Deleted: accurate 9 P y- P ,o- assumptions Thrs 5 addition to other responsibilities including; publishing the "Local I . Government Retirement- Systems.Annual Report maintaining computerized data information of all ;Deleted: public employee rettrementsystems in Florida cooperating with local retirement systems on areas of mutual concerns and pu6l'A rig fact sheets on each local government's defined benefit plan. As part of the recommendations contained m` the Financial Rating of Local Government Defined Benefit Pension Plans Report prepared by °the Florida Department of Management Services, the Department has recommended that the Legislature establish a standard rate after having evaluated the issue with feedback from interested parties. Further, the report noted that, as of Budget Advisory Committee Pension Reform Report Page 1 1 S September 30, 2011, the average (mean) rate of return assumption for local government pension plans in Florida is 7.78 percent and the median rate of return assumption is 8 percent. (Source: Financial Rating of Local Government Defined Benefit Pension Plans, Department of Management Services, January 25, 2012. In the meantime, given the poor investment return experience in recent years the Florida DtVESIan ' g w of Management Services is already cautioning the local govern mentf,ipension plans regarding their assumed rate of return, as shown in the except below, regard inghe MBERP 10%1%201 ° 0 valuation. 4A r° (2) Valuation Interest Assumption: The 1011/2010 valuation uses an 8.25% mterest'assUmptipt) to discount Plan liabilities. Plan annualized investment returns through 10/1/2010 were 3:75 %, 6 14 %� and 5.58% per ahnum over the last three, five and eleven plan year periods respectivel entling on 10/1/2010. We will continue to monitor these results in future reports. Source: March 12, 2012 Department of Management Services letter tWBERP P 9 � t; K £ a 7� M #, ...y •. CNIB HISTORICAL PENSION COSTS AND UNFUNDED"LIABILITY , The following tables reflect the historical changes of annual F urred contributions the `unfunded actuarial accrued liability and the percent funded foreach of "the City; oftiMiami Beaek defined benefit en sion p lans. Re Deletedp ¶ PenSlon Chart 70,000,000 ----- ._..__._.__ _.._______.._._ -. - -.— ¶ - - - - - -- - -- -------- .- .......... 60,000,000 - - - - -- .... - ...... ............... . .... . _ 50,000,000 M Pension Bond Payments � i � n 40,000,000 — 0 401 Contributions 30,000,000 -- - 20,000,000 " N General Arc 10,000,000 0 Unclassified Arc W >a MBERP ARC q � �� 1�� �� ti��o � oo � oOa 00 Oti `e\ i ', F a Fire and Police ARC ti L Q z., i Budget Advisory Committee Pension Reform Report Page 12 . t ^ Total Unfunded Liability : :593 19Y 9: 1rYf '.4) 194P 1453 .10�C 1001 S 5 E _ M JfWk P Y P4r ��� h _ .___.._ „-"-_.__........ _ . . . .......... .......... ...... . .. ........ ... .. _ . -- t jIx AM 5 <oo W4A4C7 . . ..... . 1 � I Y� yE I' The Total Unfunded Actuarial Accrued Liability (UAAL) of City” pension plans as of 10 /9 /10 was $441 million:. Fire /Police: $291.9 million; a General: $148.8 million By law, the City is responsible for funding theUAAL even if employees are transferred to other employers, and even if the current pension plans 6i.ik osed, frozen or terminated. However, this also means that the combined assets of the plan today are a1mosY:$1 .billion. Funded Sta9us H of Miami Beach Pension Plan, as of 10 /1 /.11 Fire and Police MBERP ACT ACCRUED LIABILITY. $8:18 MILLION $580 MILLION ACT VALUE OF ASSETS: $531 MILLION $431 MILLION, Deleted: 526 _.. ?ERCENT FUNDED: 42.0% 74.4% Deleted 64.3 �. �� Deleted: The 2011 report prepared by the Leroy Colllns,lnstitute at Florida State University for pension systems across Florida assigned the following,g "rocles to pension plans based on percent funded.. Budget Advisory Committee Pension Reform Report Page 13 GRADE PERCENT FUNDED A More than 90% funded B 80 to 90% funded +NS C 70 to 80% funded D 60 to 70 %funded. F Less than 60% funded y' Based on this grading approach, the Fire and Police Pension Plan would receive a D attng while > MBERP would receive a C rating_as CMB BUDGET IMPACTS The total adopted General Fund Operating Budget is $244,336 740 Qf note, the FY 2011/1;2 General Fund budget is only about $6.6 million (less than 3 percertl over the FY 2006/07 ud et and the operating millage is 1.2085 mills less thanahe 1Y 2006f07�budget despite Deleted: bud pension increases of $24 million during that same period At th' penstoii costs alone represent $52.4 million (21 percent) of the total General Furi budget, With the Ftre and Police Pension Plan representing approximately 16 percent and the MBERP representing approximately 5 percent. The FY 2011/12 City contribution for the Fire and Police Pension Plan "is $3,6.2 millii" !'(72.76% of Fire and Police Pension Plan ,members' payroll) The `FY 201 ntribution for the Deleted: members General Plan is $17.1 million (25.02% of MBERP members payro[IJ, lfollo, collectively bargained benefit adjustments in 2010 Of note while City contributions farJK Fire and Police Plan are more than twice that of the General Plan, empayee contributions for each are $7 million and $5 million, respectively. � As part of the recommendations contained m the Financial Rafrngof Local Government Defined " Benefit Pension Plans0Reporf repore, y the_Florida Dep -' h` " t n anagement Services, the Department recommended the following percentage point system components (in conjunction with other p components t toting to 100 %) to evalugte the financial susfainability of a plan, for each component de iving"a ratio by comparing th esonsot contributions as a percent of the valuation payroll tp Percentage ofi, Valuation Payroll 49 10% 5% 3 10 9.99 3% ° 1 /° 0% y ail Based on this grading approach, the Fir'''ancl Police Pension Plan would receive Zero percentage points while MBERP would receive a i l- percentage point. Deleted: i p e r ceNoge Budget Advisory Committee Pension Reform Report Poge 14 2. RECENT CHANGES TO PUBLIC PENSION PLANS s CITY OF MIAMI BEACH M The collective bargaining agreements entered into by the five bargaining units in the City of .Miami Beach in 2010, included a series of changes to the both the Fire and Police Pension Plank and the Miami Beach Employees' Retirement Plan (MBERP). These changes are outlined below. �s �, E Changes to the Fire and Police Pension Plan • All Employees • No retiree cost of living adjustment (COLA) f&L�at least 2 years for participants entering the deferred retirement ophon (DROP) after4 9/1/12 (Years 3 and 4 of DROP) • Off -duty compensation pensionable /sick leave sell baak upb the overtime n compensation cap , • New Employees Only 01 • Minimum retirement'Age of 48 for Rule of 70 • Pushed back increase in mvitip #ier from 3% to so that it occurs in year 20 instead of year 15 k , • Final Average Monthly Earning (FAME) increased' ftighest or last 2 to highest or last 3 years g:, • Retire COLA decreas "- -from 2 5% to 1.5% The impacts estimated fsy E164C6nsultants, the actuary for the Fire and Police Pension Plan for changes for existing tie and f olive Pension Plan employees were minimal, with an initial cost increase of $368 -B45 tnc #uded in the aetuaria# „ impact statement Wbe offset in the future by a savings of appraximi�fe #y $651,322At tlxis Ifine,, these changes' have not been implemented pending IrtigationNI The savings estimated by Actuarial Concepts Inc.,. the City's actuary, from these changes fornew Fire and Police Pension `Plan employees generates a Net Present Value of $32,$ mtllian over years; however, savings in the early years were minimal. Changes to MBERP • Pension changes for I p #ogees • Increase ion employee pens contribution by 2% • 5 year final avera - in eriod (phased in) • Additional reduced pension benefits for employees hired after 10 /1 /10: • Increased normal retirement age Budget Advisory Committee Pension Reform Report Page 15” • Reduced multiplier from 3% to 2.5% • Reduced retiree COLA from 2.5% to 1.5% The savings estimated by Gabriel Roeder Smith and Company (GRS), the actuary for MBERP- based on the changes to existing MBERP employees was $3.3 million in year one The'] m`p"6 ci R the changes to new MBERP employees was estimated as $900,00 m the first yea r'and approximately $6 million per year after 10 years. Kzl p Other Jurisdictions in Florida`' (Source: Lewis Longman and Walker, P.A.) - -r Many jurisdictions in Florida have also experienced similar changes to their defined benefit , pension plans. Below are examples as of�ebrua 2012. 1 1 Deleted: February Stuart (2007 All Employees Deleted L • All City pension plans terminated- -- .... - — - ......... • City joined Florida Retirement System (FRS) for all employees`' ' • City purchased past service credit under FRS for all employees , H i 6 k" - General Ft. Lauderdale (2007) ` ;¢ • Closed general employee defined benefit pension plan' • Set up defined contribution plan for new titres Coral Gables (2009) - Police " k • Increased employee contributions for police officers by 5% • Reduced pensionable earnings (excluder�o'vertr�me m excess of 300 firs. and lump sum payments for compensgtory time) 4 0 Naples (2009) Fir • "Stop & Retar# E tmple" "merited premium taxes that the Ctycan use to offset City pension.. contribut�ptts tticreased from $776K to $167 million per year • Share?Ipn" set up with excess premtun fax revenues Port Orange 420101 Fire [Not Yet Implemented]* • Reduceclp wages by b% (imposed in lieu ; of increase in employee pension contribution) • Reduced penspnbeneftts for current aril future employees • Push back !`6 ormalehrement date`` • Reduce pensionable earmrigs (exclur3e OT) • Extend final averaging period f6't "3 to 5 years • Reduce maximum benefit,frdm "90 to 80% • Reduce COLA • Reduce deferred retirement option plan (DROP) earnings * Litigation pending Budget Advisory Committee Pension Reform Report Page 16 Delay Beach (2010) General Employees Final average compensation period extended from 2 to 5years •' Normal retirement age delayed to age 62 (was 60) • Employee contributions raised from 2.5 to 3.05% • Standard benefit changed to single life annuity (was 60 & jotnt &survivor annuity) • Line of duty disability reduced from 75% to 65 %., fi 9 jw4. h Coral Gables (2010) — General [Settlement approved by union members and City Commission in July 2011`)P • Pension benefits frozen; reduced benefits for future service Pension changes for current and future employees:k Reduced multiplier for future service (from 3% to 2.25 %)' • Increase employee pension contribution by 5% (to 10 %) 5 year final averaging period (phased in from 3 year average) • Delay retirement age to.age 65 or "Rule of 85" (from age 52 or Rule of 70 ") • Reduced disability benefits Future pension cost increases shared by City and employees • City may establish defined contribution plan in future for new hires v Miami (2010) — Pension Changes (All Employees)* " [Financial urgency declared — City Commission adopted wage °and benef r`eductions 8 1 - Later normal retirement age (to "Rule of 70 wtR minimum age" of 0 from Rule 64/68) • 5 year average final compensation (was hrgfiest�stngle year) • Reduce benefit formula for future service f to 3 °f from 3.5% after 15 years)) , • Normal form of benefit: life and 10 years certain (PF); life annuity'(Generc • $100,000 cap on benefits * Litigation pending a� Palm Bay (201 ll Fire M. fi [Settlement approved 5/19/1 l impiemented M arch 2012] Deleted: not yet implemented ll • 3 year wage freeze -. _ ___...._.. -._ • Reduction m p' sion benefits fo current employees Re`&& n m supplemental beneftt (from $25 to $12 per month per year of service) • Reduce.fut. re pension benefits for future :emp)oyees Reduced multiplier — 3.2% after 20 years (was 5 percent after 20} - 2% 5'retiree GGLA deferred b years (vras 3 °lA) Line 0 dutyzdrsabthty benefit 66% (was 75 %) • Stop /Restart one -time ,transfer of excess premium tax reserve to reduce city's contribu ion; increase :each ,year m "frozen amount" used to offset City annual contribution . _:As a resu fihe stopfres }art, the able, to use $825,000 in .premium 1. 1- -- tax - revenues each_ reduce the City s required contributions and the City received a . one-time transfer of x'825 3 000 to red duce the_City s contrbutions this Year.. Budget Advisory Committee Pension Reform Report Page 17 Town of Palm Beach (201 1) — Firefighter Pension Changes F [Town Council imposed wage and benefit recluction changes implemented m May 2012] Deleted: • Pension benefits frozen "Hybrid" plan implement Deleted 4/21/11 J • Pension changes for current and future employees: ` CDeleted 1 • Reduced multiplier for future service (to 1.25 %) r' jz - * • Defined contribution plan on top of defined benefit plan wi th town n -- - - -.._ _ ._ .._ ... ..... _...... mafCt` &� ' Del etCd total 8 %max. 1 __ • Normal retirement under defined, benefit plan delayed to age ,65 (but defined" contribution plan distributions may begi e r g artier Deleted: at age 59 and one -half 1 • Joint & Survivor Annuity abolished; replaced with life annuity (member ft ay purcNo survivor benefit) • No COLA __. ..... __. _._ • Town wiflulrew from participation in Ch, 1751 185 ' ; Deleted: will w Florida Retirement System (201 E • 3% contribution effective 7/1 /11 (was 0) A z a • No retiree COLA for service after 7/1/1 1 (was�3 °fa) • Delayed normal retirement age for members who tarn FRS 6616V after 7/1/1 1 • Regular: Age 65 or 33 years (was k pr 30 y ears) • Special Risk: Age 60 or 30 years (vv =or 25 yeas • Average final compensation: highest 8 "eats for members who tolra FRS on or after 7/1/11 (was high 5) • 8 year vesting period for members wha Iciin >f on or after 711 /11 (was 6 years) • DROP interest = 1.3% for members who`ertter . DROP after 7/1 /11 (was 6.5 %) * Litigation pending r `A Hollywood (201 AttEmplo'yees * �' 3,4 tv , [City declared findnclal urgency; penstan changes .,approved by referendum on 9/13/1 l,[ t Deleted: ) • Pension ben6fits frozen for all empbyees� • Pension changes for current and future employees: 17elgyed normal retirement date (Police /�lre —age 55 with 10 years or age 52'with 2 5 years,; General — age 65 or age 62 with 25 years or age 60 with 30 years) r • Reduced "benefit multiplier 2.5% police /fire; 2.0% - general) • 5 year f ma averaging period (no4v 3 years) • No COLA for_.futureservtae • No DROP a • City will withdraw from participation in Chapter 175 and 185 *_ _pendi.ng _ Budget Advisory Committee Pension Reform Report Page 18 Sarasota (201 1 ) — Police [City Commission took final action to resolve impasse 10/17/11; not yet.implementedl, • Pension benefits frozen for all employees • Pension changes for current and future employees: 5 year final averaging period (now 3 years) • Reduce retiree COLA from 3.2% to 1.0% beginning at age 65 Overtime limited to 300 hours per year • Standard form of benefit: 1.0 years certain and life (now; 2/3 automatic spouse=° survivor benefit for life of spouse) ��1b Reduce DROP interest to 2.5% (now 6.5 %) ° "f • City withdraw from p articipation in Chapter 185' f: Other Jurisdictions - Outside of Florida California (2012) (Source Associated Press, March 13, 2012) k In March 2012, Governor Brown proposed changes for public" "employee pennon benefits to California with the aim to replace about 75 percent of an employees safa%y through retirement funds and Social Security for employees with at least 30 years service(ie proposeckfpnges were estimated to save about $900 million annually The_ proposed changes included Raising the retirement -age to 67 for new employees who are not pu6l4c safety workers • Requiring state and local workers to pay rnoretoward the retirement Creating a mandatory "hybrid" systen,tn which future employees would get retirement from a guaranteed benefit and a 401(k) style plats Eliminating "spiking" r (boosting payouts' b rncfudmg overtime and other benefits) and "air time" (buying addrt�onal'service credits) • Mandating that that public empl yeas pay an equal shareof"pension costs R` Y„ . New York (2012) (Source msnbo�com " staff and news services``MdM 30 "2012, 8:14 AM) In March 201"2, chdrtges for New York retirement benefits were approved by the legislature affecting futurg workersZand reducing costs by approximately $80 billion over 30 years. The reform included ) ♦tiefollovrin :chan es amon . other measure: g� g g Increases the amount higherearning public employees contribute toward their retirement plans • " Raises the retirement age by a year, to 6-3 Budget Advisory Committee Pension Reform Report Page 19 Texas (Source: WSJ.com Opinion: Considering the Texas Alternative to Social Securtty September 30, 2011) =$ In the 1980s, Galveston, Texas pulled its employees out of Social Security a d set up an aIternaf plan based on individual accounts. This plan has generated higher returns and benefits than a Social Security.Z i�' Deleted seemingly pointing to a solution to h w °� Social Securi s mu lti Irilliontlollar shortfalls y � � r S a l ' A _k _ AMM N" ad >. E rr s� 4" � g s 5� )4 K ; 2 M t s s a, 0 si z„ Budget Advisory Committee Pension Reform Report Page 20• 3. CURRENT PLAN! STATUS The following section provides an overview of the benefits provided to both the Ftre and Pollee° defined benefit pension plan and the MBERP pension plan,- including an overvieW�of �currenf° benefits, changes in benefits over the years, the plan status and projected costs:of e&KMefQ benefit pension plan for the next five (5) years. j A l } It is important to note that City of Miami Beach employees do not participate ci In Soal Security, .a €' factor that should be taken into account when evaluating benefits received a a {4� d FIRE AND POLICE PENSION PLAN F9 Overview of Current Benefits Y MEN i ultt��r 3 Djd SJ% � (� °rafter 26 yrs {9S7�X s Norm. Ret aDnte Age 50 w /L yrs or�Ruteaf 70 5 w/S �or 25 Y 52 , xr425 Yrs ~ ( e mtlttarr tred after _ or Age 5� 9nthtary '�'° — �rna!�l�vg �s�r2��I5 s COLA 2 5 %annual None for benefits earned after 7 /ls /1 l �Erhp ojree t t (} %� s3%6 us of 7J jl l >x� t r Gity Cas 71:67% 79 $ °f nex�tt ld 1 (19 5 %next yea�)� sPr @It31UlYta d , r t xTofal Cost n7a' % next a „� 17 1 °/ (22:5 ° / next year) ,.r z _s 5oc�al Security t Yes IN fr f M O -. IN * These do not reflect changes negotiated =in the last collective bargaining agreement, which are Deleted: agreement which subject to litigation as discussed in the ptior section "2. Recent Changes to Public Pension Plans ". * *FRS changes implemented 711 subject to litigation c Budget Advisory Committee Pension Reform Report Page 21 Premium Taxes /Share Plans Chapters 175 & 185, F.S. provide for a rebate of the state excise tax on propertyp','af6di insurance premiums to cities with police and firefighter pension plans, known as premium4axes'; The premium tax monies must be used exclusively for firefighter and police pensions and the local pension plan must comply with the requirements of Ch. 175 & t185 Premi`umtaxes y received in excess of the "frozen amount" must be used for extra beneftfs sE W f _. _.._._._._.. _ .. ..... In 2010 the City received a total of $, million in premium tax revenues. about 3 87% of payroll y i;De el ted � ,approximately $2. million in Chapter 175 premium taxes for firefighters and approximately p ee, ted wdhC ity6refightersreceiving $525,000 in Chapter 185 premium taxes for police officer - J Deletes __.. _.. - " 1 Deleted: 1.5 The City is able to use $120,000 of the premium tax money received edch:Year to offset the Deleted: and police officers receiving City's contributions to the pension plan. This is the "frozen amount." The rest of the prem gum �ta�x approximatel money - $2 8 million last year - went to "share plans" for fire fighters pnd police officers Deleted: $600 ,000 __ ....... _ t� Deleted .. _— - - -- -- A "Share plan" is a defined contribution plan with individugt accounts wftete a proportionate share of the premium tax proceeds based on tenure are deposited each year The fireand police share plans provide a lump sum payout to retiring firefighters and police officers on kop of their ................... _..... ,.._ Cit p ension benefit -this is an extra benefit. T ical e nefits for those membetswho had the Deleted: amounts ty P YP .. - - - -._ ..._ -- ... -- _ . . . . __ most years of service are $100,000 for fire fighters and $60,000 for police officers N Q w Under current law and State non -rule policy, the City` wtlj lose premium tax monies if "` r __ • The current plan is closet{, or terminated; � " = � Deleted_, frozen _ _ _. • The City joins FRS; or • Benefits are reduced below Ch 175 /1$5minimums K M �Iso,_ any increase _in employee contributions fo police o ff ice rs . and firefighters u nder Chapter I Deleted: Increase in member contributions 175/ 1,85 must be ag reed to by the polic and file u n`ions Arty tr ansfer of premium_ tax monies i . requires collective bargaining and benefit es i ncrease.¶ for the police and .fir ,sh'are lansN to the. Gtr . _pensi on funs# to r educe the City's required contributions mu also b eareed foy " 4h e unions _ .... ........ _....__.._ Reminder: onl $120 000 is used r ffset o c , t of ,the City's defined benefit plan for Police and ( Y z,, Fire; while the balance "of $1.9 million annuallygoes share plans). W., !. r Budget Advisory Committee Pension Reform Report Page 22 Summary of Changes in Benefits Both, the Fire and Police Pension Plan and the Miami Beach Employees' Retirement Plan have:,. evolved in Benefit changes over the years and details of these changes are providedn 'the 'Appendix. In the Fire and Police Pension Plan, there are currently 34 members0 h' were hired prior to y October 1, '1989 (when the Plan's benefits were generally lower thanthey are today} who have"; not joined the Deferred Retirement Option Program (DROP. In 1989 the SupplementalPlan was introduced for Miami Beach Fire Fighters and Police Officers. This plan provided for benefits above the levels in the original Base Plan. For example, the multiplier of 2 5 percent forJhe first ` 25 years and 2 percent thereafter was modified to 3 percent for the first 1,, years and 4 percent thereafter. In addition, benefit increases were also made to the retiree COLA, "the maximum final average monthly earnings as a,percent of salary, disability, beneficiary supplements and >Auy c of military time. However, at the same time, employee contri butions were increased to10 percent. a l :a In 1993, some of the benefits were reduced for new employe es� P l Fo ' exam e the muftiP , tier was reduced to 3 percent for all years and there was a reduction in ; the retiree COLA However, the employee contribution was maintained at 10 percent. There are currently¢ °15 achve members ° hired between October 1, 1989 and May 19, 1993, whicht'have not jolt ed DROP ;. A� In 2000, the Base Plan and Supplemental Plan were mergecl and most benefits were returned to the 1989 levels for all employees. In add ition,.the reh.6ment age benefit was to age 50 or the Rule of 70 and in 2009, a DROP benefit and a buyback provision Wire added. r� �:�, 4 Budget-Advisory Committee Pension Reform Report Page 23 Plan Status FIRE AND POLICE PENS ION, t As of 10/1/10 Valuation (FY 2011/12 Budget) PLAN . _ FY 2010/11. _ .. ANNUAL CONTRIBUTION REQUIREMENTS (ARC)* $ 34;416519 ; s' PENSION BOND PAYMENTS 4;495500 K� v e 401K MATCH TOTAL ANNUAL CITY PAYMENTS $ 38,912019 VMS-,! , s GENERAL FUND COMPONENT ARC $ 33 748 250 € PENSION BONDS 4 410,11,K -MATCH _. f % OF GENERAL FUND BUDGET ....... .....__ .....__... .. FY 2011/12 ANNUAL CONTRIBUTION REQUIREMENTS (ARC)* $ 36175510: PENSION BOND PAYMENTS 4;495500 x W, w 401K MATCH TOTAL ANNUAL CITY PAYMENTS $ - 4 10 .. _ .._. _ fi GENERAL FUN DCOM s ARC $ .............. P ENS�IONrBQND S 4, ... . 366259' y „„ <�� ,;401K MA3'Cff _ 1. .11 - _ _ _...._.... % OF GENERAL`FUNDB,UpGET ” ;- 16% EMPLOYER A RC AS A % OF PAYROLL NORMALCOST* 32.59% A(110RTIZAI[pN, OF UNFUNDED L IABILITY 40.17% TO7AL % PAYROLL `,.,.�4 6 72.76% 15 s E v ANTICIPATED EMPLOYEE CON TRIBUfIONR $ - 4,971,896 ? r UNFUNDED LIABILITY AS OF 10 11110(UAAL� $ 291,931,506 F.,UNDED RATIO (Actuarial Value of Plan Assets: p less <Accrued Laibilit -Past Service 64.3% _!. PENSION -PLAN MEMBERS a __ . . _ .. . ............ .._ %k`CTIV + x 468 f3ROP 67 59 RETIRED B ENEFICIA RIES _ 505 TERMINATED VESTE6MEMBERS 13 TOTAL 1,112 Budget Advisory Committee Pension Reform Report Page 24 Plan Projections The following projections were provided by the plan actuary, Buck Consultants based; on the; 10 /1 /10 valuation data, which assumed that the assumed rote of return for FY 2010 /1 l, 1 5,1 be 8.3 percent. The actual market rate of return was - 0.58 %. However, preliminary esbrnates' for the increases in contribution requirements for the 10/1/10 valuation °ore between $3 mil ion and $3.6 million, similar to those projected below. E now E E� ... E ME " M Discount R' ate 8 3 < �8 2% 8 1% 09/c 8 d 3 ' yty ? :✓ SVOr, e a Cu ertt Bargai>TingAgreernent ARC (m`mtllions) 34 4 36 2 39 7 43'. -� °l°of Payrotl =�r 6�b 6 ,�6A° =722 81 i 1 t. _. . MBERP� a m— Overview , ; c of Current Benefits �1 tw Norm�Ret� � y Age;�s ���� . � <� � � s or 62 after F fin p ghes} 5 yrgh yrs(13"I ° � i a: >� AIR- 4 91 ° f° (6'58 %�ieCt year) s + & s� �� Total Cost 37 5 Wnext -year) Social Security Yes Budget Advisory Committee Pension Reform Report Page 25 Summary of Changes in Benefits As noted previously, the details of benefit changes to the Miami Beach Employees` R,etiremert. Plan over the years are provided in the Appendix. h ,' Between 1988 and 2006, the General Plan (Classified employees) and the Unclassified flan were separate. The Unclassified Plan generally provided for higher benefits, , ihowever required a higher member contribution. For example, the Unclassified Plan provided for "­`­A`­" prcent multiplier, a normal retirement of age 50 with 5 years of service, 90.pereent maximuWpension benefit and a member contribution of 10 -percent. The General Plan prodded for 2.75 multiplier for the first 25 years and 2 percent thereafter, a normal retirement age�bWeen 55 and 60 (depending on years of service), an 80 percent maximum pension benefit ae abercent member contribution. _� In the early 1990's both plans bifurcated, providing for different benefits in each of the plans for all new members. Upon implementation, the current active members�of, the General Plan£ is �� (Classified employees) generally received higher benefits, while newly, (tired, members of the General Plan received benefits that were similar to the newly members to the Unclassified Plan. In the Unclassified Plan, benefit levels for both, existing and'new members were generally reduced. In 2006, the two plans were merged to; create the Miami Beach Employees Retirerrint Plan ( MBERP) and some benefits were increased, for example 'S 3 • Retiree COLA was increased fromAl' S% simple to 2 5% compounding for all members 2 qq • Retirement age became 50 with5 years of creditable service for pre bifurcation members (Unclassifie`demployees receivedprebifurcation date benefits and Classified employees experienced increased benefits) ` • Retirement age was decreased for postbifurcation members from 60 to 55. • Member contributions were reduced�o 8 percent for post bifurcation � MI- mem ers Further reductions were.iinplemente n 2010 for.both, existing a"n"d new MBERP members, as presented in the prior section. 4 N ry fi j p f d' G � n Budget Advisory Committee Pension Reform Report Page 26 Plan Status MIAMI BEACH EMPLOYEES RETIREMENT PENSION PLAN (FOR GENERAL As of ... 30 /1 /10Valuation (FY 2011/12 EMPLOYEES). ..... ..... ...... ._... FY 2010/11 ANNUAL CONTRIBUTION REQUIREMENTS $ 14474678 ... - PENSION BOND PAYMENTS 49 9 e 50Q . �; 401K MATCH :1t'c 14 �' .. .... TOTAL ANNUAL CITY PAYMENTS $ 14,974178 i ..... U —, a .... .. ..... ...._ b z GENERAL FUND COMPONENT s _.. ARC $ 9,287 147 _ PENSION BONDS 485 140:+ a f . 401K MATCH % OF GENERAL FUND BUDGET 49 E FY 2011/12 q ANNUAL CONTRIBUTION REQUIREMENTS (ARC)* $ 1711 PENSION BOND PAYMENTS 49%50,0,; 401K MATCH .... - TOTAL ANNUAL CITY PAYMENTS $ 17615813 a A GENERAL FUND COMPONENT 10;964684 PENSION BONDS 4QIK MATCH _.._..._.. ... ..._._..__ % OF GENERAIF,UND BUDGET 5% EMPLOYER ARC ASA %OF PAYROLL N 0RMAL COST* 10.8Wo ..... ° AM,ORTI7AT(ON'OF UNQW LIABILITY �, 14.22% TOTAL.EfvIBLOYER. %OFPAYROLL�, , ;,,�z_.. 25.02% ANTICIPATED EMPLOYE E£ONTRIBUTlON $ 6,995 UNFUNDED LIABILITY AS OF10JIf10(UAAL} $ 148,766,860 -. FUNDED RATIO (Actuarial Value of efs ' less Accrued Laibility -Past Service)..,,, 74.4% �.; �a PENSION PLAN MEMBERS (V 1 ,117 49 D1SA8LED i 40 ` RETIRE &_ @ENEFICIARIES „'�., �- _ .__. 981 TERMI NATED UE5TED N4tMBER 0 75 mi TOTAL 2,262 Budget Advisory Committee Pension Reform Report Page 27 Plan Projections The following projections were provided by the plan actuary, GRS, based on the 10 /51gl10, " Vijic valuation data, which assumed that the assumed rate of return for FY 2010/11 would b 8 25 _ � _ .......... _...._ _._...... ........... percent. The actual market rate of return was -1.2%. However preliminaryestimates for the Deleted: increases in contribution requirements for the 10 /1 /10 valuation are still peridmg from the pension board. r o M- Discount Rate 8 2 p 8 25% 8 25% 8 25% �5alary Scitle , Cufren I.T ai t A reer en � � t ARC (iffirnillions) ;3� h Of of Fayrolt �: ' 25 3CtZ 34�%8 7 X132 0 , a� ry � - tt h R t F Q Al ' Budget Advisory Committee Pension Reform Report Page 28 4. RECOMMENDATIONS { D el e t ed: ..... 7 __ .._ . Through a series of meetings over the past 12 months, the Budget Advisory Committee (BAC)p' evaluated the options under consideration for changes to the Fire and Police'Pension Plan over the ;. course of several meetings. �F p ,. P BAC MOTION RECOMMENDING PENSION REFORM �� , On April 17, 2012 the BAC approved a motion for Fire and Police Pla ",reform combining a number of prior individual motions. The combined motion k tncludes #hefallowmg motion and vote counts for pension reform for the Fire and Police Pension Plari. • Recommending Options 111D2 for new and non - vested Fire and Police Pension ension Plan employees shown in the table on the following page qft Note: 'this portion of the motion was initially adoptedasa, eparate moton by a 72 vote of the BAC. X ` . • Recommending that the City negotiate changes for °vested Fireand Police f ensign T Plan employees to achieve thresholds in the poll i and gu idelines,Adopted by the BAC (see Section 4 on Policies and Guidelines). _ '" T r Note: this portion of the motion was mihally adopted as a separate motion by unanimous vote of the BAC. s r f A` 5 UAW � SR 5 Z F Budget Advisory Committee Pension Reform Report Page 29 HYBRID OPTION IIID2 FOR NEW AND NON - VESTED EMPLOYEES The current Fire and Police Pension Plan will be frozen. Provide a defined benefit component for Police and Fire non - vested and new hire employees to equal the minimum benefits °to recelye Premium Taxes from the State as defined by F.S. Chapterl75 /185 and,a defined corifinbufion component of 1 1 percent funded by the City (with employees provtding "a matehtg 5 %� contribution). E X ' Multiplier Final Average Monthly Earnings (FAME) Calc - in years . Highest 5 of last SO Retiree COLA* 0.0% & SRO* Normal. Retirement Age X 55 &10or 25 'f � ..y d� • Employee Contribution to DB ** %Employee Contribution to DC 5 00% • City Contribution to Social Security • City Contribution to DC 1100% Share Plan DC (See Note Below) Yes 7 _ No Social Security 75 %Joint & Survivor with Beneficiaries X120 months guaranteed *Provided, thd0he City Commission may peciodtcally adjust the COLA-up to 1.5% compounded for a and COLA resets to 0 °I :for the following year unless the City Commission afhrmahvelyvotes to increase above 0/ for(he nexthscal year T6islwesents a minimum consistent with F 5 175/185 but the defined benefit employee contribution can be set at any 4evel wi Piett! Premium:tax revenues for Fire and Police Plans are expected to continue. This results in reduction of pension benefits asa percentage of payroll to 21 %over 30 years and a net present value '(NPV)T savmgs of $74 mil {tan over 30 years. In addition, year 1 savings are estimated at $2.5 million f , 34 While the savings can be achievedibyother means, the reduction of risk through a hybrid plan is the key benefit to the City. The City <will retain risk on the defined benefit portion of the pension; however, will have no risk on the defined contribution portion. In this regard, the City's risk is reduced by 40 -50 percent. The employees will have a new risk associated with the defined Budget Advisory Committee Pension Reform Report Page 30 contribution portions of this plan; however, (1) this is a risk of investment that a majority of the public faces (i.e., nearly all private sector employees have defined contribution plans), and (2) All along with the risk comes the reward as well to the extent that the employee invests wisely The; reward potential exceeds the reward potential under the current defined benefit plan s ,4 NOTES ON RECOMMENDATION AND REASONS FOR NOT RECOMMENDINGh OTHER OPTIONS OPTION I: Florida Retirement System (FRS) The FRS was not recommended because the City's u loss of control of expenses 'to Tallahassee, ongoing litigation regarding R sionchanges implemented in 2011, news of projected shortfalls and payment increases andfossof the premium insurance payments. Y OPTION II: Defined contribution similar to FRS, including a Social Security e A quivalent — ltho ugh 3 this option eliminates risk, it was not recommended because of concerns w savings potential;' g iven the relative) earl a ges for retirement eligibility the im ,t dial ortexisting non - - 9 Y Y 9 p ac ompor � vested employees and the potential that this may prove to be unattroctive to recruit police and fire employees in the future. t OPTION III: Hybrid Plans We recommend the City adopt a %bnd approach mWCfplion IIID2, and do not recommend the other hybrid plans because although they reduced the risk to the City did not generate the NPV savings of O tion I11D2. h'- Y 9 9 P , OPTION IV: Changes to the Existing Pension f'Lan Past Service /Future ServiceApproach (with a combined benefit). Changes to the existing: pen on plan are recommended in regards to vested employees in order to meet the Poli and O urdelines identified' in Section IV. However, they are not recommended for non- vested and= riehire employees because although they can generate the NPV saving they'do not reduce the City's risk, and risk reduction was a key factor in the BAC's recommendation -,K ti U. - - a' • �-t i - �� S �5 L S ' 'WA � Budget Advisory Committee Pension Reform Report Page 31 i _ .- .. . ............... ........... . .. . ... . .. ........... .. . .- . ....... 5. FACTORS FOR CONSIDERATION { Deleted:4 - -- - _ ... _ . _ . ...... . . .... i F ormatted. In developing recommendations for pension reform, several factors need to be taken646 �,,. FINANCIAL AFFORDABILITY AND SUSTAINABILITY OF THE #j1jAN VS PROVIDING , - _ .- . .. APPROPRIATE BENEFITS AND ENSURING, PMR9TITIVENESS ��' Deleted COMPETE7IVENE55 Financial stability and affordability, including the ability to reduce risk or sfiare� the risk wi th "" s . employees, is often contrary to providing appropriate benefits for employees and ensuring that these benefits are competitive with other jurisdictions in order to ensure that:the Crty has the ability to recruit highly qualified employees. This trade -off was considered in developing recommended policies and�gvideI, s as discussed n £ ;� the following section and in evaluating pension reform alternatives �4€ In addition, it is important to note that City of Miami Beach ernpoYees do not pa "rttcrpate,irr Social Security, a factor that should be taken into account when eval""t�ing benefits received UNFUNDED LIABILITY — NO INSTANT FIX ��� zz s Under all scenarios, the City retains responsibih#y ('funding the unfunded gccrved actuarial liability (UAAL) of the plan. The UAAL is typid Jlyarnortized over a period of up,to=30 years and is only reduced (although usually not elimi""' through actuarial gams or benefit reductions Deleted: changes in benefits going forward for Therefore, under most scenarios, it will take a't'least�30 ye . ars to eliminate the current unfunded existing employees ' �.. - - -._ .... _ ... — - -- - - - - -% liability even while maintaining the assumption th here will be no further increases due to experience losses or assumption changes In the City of Miami, �edch "" "`Pension;= Plans, the „payment for ;the UAAL each year amounts to approximately, half of a e City's annual g [e�qurred� contribution. Therefore_, in the short term, the f Deleted: Therefore ability to reduce costs is significantly limited �� f HOW MUCH' �RISK V1 , 11, THE CITY WILLING TOUKE? i Risk in defined benefifi , , , pensiqop lans results froftt fhe Volatility of investment markets which impacts the City's required contrrbuttor rates The Crty`s rtsk``can be reduced by: • Sharing risk with employees For ea mple, increasing employee contribution rates in some relationship to increases. in City -contribution rates. Budget Advisory Committee Pension Reform Report Page 32 • Adopting a more conservative investment policy and reducing the associated assumed rate of return - However, this typically increases costs significantly in the shortzterm. • Converting a portion, or all, of the defined benefit plan to a defined contribution plan, ; 3 because the defined contribution plan specifies the City's risk -free contribution rate, and the employees then assume the risk of their investments.' ff r LEGAL GUIDELINES (Source: Lewis Longman and Walker, P.A.) h> The following are legal guidelines that must be taken into account when consldermgpotential pension reform:ry • Changes in retirement, benefits and employee contributions arb mandatory subjects of ; collective bargaining As a result, any recommendations by the M"Oi*ust be bargained ��. • Accrued pension benefits (benefits earned in the post) cannot be reducedior taken away. However, future benefits can be reduced for current employees who "have ,not reached' retirement status. • The City is ultimately responsible for unfunded pension Ga u= What are Options to Reduce City Pension Costs? : The options_to reduce costs are as follows eac"F`. hich are discussed in the following section: Terminate, freeze or close current pension plant (see�definitions below), and set up a lower cost plan /benefit such as. Flonda Retirement System(FrRS) • Defined contribution plan ' • Hybrid f?lan ��� -� � ` • Keep current,Gtty pension plan, but Reduce benefits for new and /or current employees �lncrease employee. contribuhons =?, "Close" existrng plan is closed to new members, current members stay in existing plan and will continue to accrue benefits, until they retire or leave, the City; future employees join new plan. "Freeze" - accrued benefits of current employee,'s'in existing plan are "frozen" and paid out at retirement; all current and futu "re employees >lorn a new plan or continue in current plan with Deleted: the - - l reduced bene fit$, . _ Deleted: and there are no new accrual of benefits under the frozen plan for onyone "Terminate" - existing plan liquidated; accrued benefits paid out to plan. members; City responsible for any deficit; all current and future employees join new plan. Budget Advisory Committee Pension Reform Report Page 33 2011 State Legislation 2011 SB 1128, revised the definition of p ensionable compensation to exclude overtime -pay rn excess of 300 hours Land allows pions to exclude all overtime pay), and exclud you tsv for accrued sick and annual leave. These changes must be implemented wifh the frrst.calleetive y bargaining agreement implemented after 711 1. y q EMPLOYEE GROUPS IMPACTED There are three groups of employees to consider when considering Impact nested employees (having worked at least 10 years), non vested employees (having worked less than 10 years) and new hires. Under the options evaluated, the impacts on the three groups of em loyees depend on the following; Cenarl05: Delet in l 1. Reduce benefits for new hires only kr w r • Reduces cost over time AN • Current employees (vested and non - vested) keep currentbeneftts- .. s � • No immediate savings -may take many years to acftie�ve' cost saulrigs savings are achieved only as new staff are hired k i • Creates lower level of benefits for new hires • New hires can be expected to eventually press for benefits € similar to longi3rteitired employees Note: The City implemented a number of pens anges to the General Plan in 2010. Modifications for the Fire and Police Pension flan are pending i n plenipitt dti6r subject to litigation. 2. Reduce benefits for new hires and non vestede �p oyees • Reduced cost over time K • Some red uctions s p • Vested employees keep current benefi ts • Some Immediate savings miry take many years to aehle a cost savings - immediate savings.ghappl ed to non- vesfetl{ �sav�gs for new staff gre achieved only as they are • Creates lower level of benefits for new non - vested employees • New 'hires and non - vested employees `can be expected to eventually press for benefits simil tenured employees Y 3. Reduce benefits ffor gall employees (excludingFthase employees who have reached normal retirement age) z - • Immediate cost savin gs - • Reduces UAAL Same benefits for all employees going forward • Reduces future benefits for currQ. (employees keep what they have already earned) Budget Advisory Committee Pension Reform Report Page 34 • Loss of premium tax revenues if Fire and Police Plan benefits are reduced below Chapter 175/185 minimums Note: The City implemented a two percent increase in employee pension contnbuhonsarid, increased the averaging period from three years to five years for all members of General Plante 2010. Changes agreed to for the Fire and Police Pension Plan for exstmg' employees wee, minimal and are pending implementation subject to litigation. M - x E rx 9, eV AMRM F `n i r, ", S E' ,- ? Budget Advisory Committee Pension Reform Report Page 35 6. RECOMMENDED POLICIES AND GUIDELINES Deleted 5 _. . i Formatted t 4 The Government Finance Officers Association (GFOA) recommends that state and locale governments have a policy statement that will guide their on -going plandesign dec stuns Tfits policy should encourage governments to provide sustainable and properly` funded retirement plans, which will attract employees in a competitive labor market, L, ate °effectrve -� management of the workforce and fulfill retirement needs. k g in developing a policy for retirement plan design, a state or local government consider the following: ti • Purpose of the retirement plan (e.g., level of replacement, income and purchasing d power retention); 4-i S • Ability of public retirees to contribute to the economic yliabiltty of'thetr community '` and not become a financial liability to the community in whi�fthey2live due to inadequate retirement income;��; • Organization's philosophy regarding employers arid. employee.�responstErhtles Yn preparing for retirement; w • Availability of Social Security, retiree eniedical = benefits, disability andsurvivor benefits and supplemental (e.g. 457) avings • Costs, including the employer's ability to sustain paymen #sand perftaps increase benefits over time and cost predictabiltry E • Labor market considerations such ds competitive environment, workforce mobility, �� t length of employee service and - re crutttnent End retention of employees; • Investment risk and control, including how investment risk is allocated between employer and 6mgoy e, • Portability csf E� • A plan design ffrat canbe "communicated to and •understood by plan participants; • Employ e e eaational efforts, and • Advantpges of the different types of plans (e.g., defined benefit, defined contribution and hybrid). x � Source GFOA Best Practices and Advisories, Deveippmg a Policy for Retirement Plan Design Options (1999 20(}7,�(CORBA)� Source: Florid o Pensions, V ©lume 1, Issue 1 Apnl,2flt2. c �r! y l s r Budget Advisory Committee Pension Reform Report Page 36 CITY OF MIAMI BEACH RECOMMENDED POLICIES AND GUIDELINES As part of the evaluation for Pension Reform in the City of Miami Beach, the Bud get, "Advisory; Committee (BAC) is recommending policies for long term pension reform. The BAC,; rs also recommending guidelines for the City to adopt which establish thresholds which if surpassed will require the. City to take prompt and appropriate measures to meet the guide'line,cntena The policies and guidelines address four perspectives: (1) Affordability and Sustamab�lity (2} Appropriate Benefits to Provide to Employees, (3) Recruitment "and Retention and (4) ; r Management of Risk /Risk Sharing These policies and guidelines were adopted unanimously by the BAC. Affordability and Sustainability Al • GUIDELINE STATEMENT: If the City's portion of the total annual cost of retirement benefits contribution exceeds 25 percent of payroll for gen g6 employees and 60 percent of payroll for high risk employees, the City should review and evaluate potential,,chang&to the collective bargaining agreements between the City and fiche "Unions, apphca'ble towards the next contract negotiations, in order, to identify potential;approaches fio K u the contributions to these levels over the long • POLICY STATEMENT: The City shall fund at feast the normal :cost of ,_ - "on. If this exceeds the amount of the actuarally de 4" 'imecl annual required contribu the excess should be placed in a pension stabthzaflon fund to be made available for future pension shortfalls. , • POLICY STATEMENT The City should strive Ito mam6i'r a funded ratio of at least 80 percent for of its define�lRenefit pension plans Owl • GUIDELINESTATEMENT. If they funded ratio (actuarial `value of assets minus actuarial liabilrhe'sJ of either of the City of Miamt "Beach' pension plans falls below 70 percent, the City I& strive to implement approaches to increase the funded ratio. to that level over fwe (5) years ' POLICY= STATEMENT Salary growth should not exceed the average actuarially assumed salary growth In -each of the.City's pension plans. • POLICY STATEMENT The CEty should require 5, 10 and 20 year projections of required pension contributions "ds partof�fheannual actuarial valuations - for each of the City's pension plans. These prolechons shall be based on -the current actuarial assumptions for each plan. The projections shrill be updated to reflect the cost of any proposed benefit enhancement before the City Commission agrees to the enhancement. The cost of these studies shall be funded separately from the annual contribution to the. pension plan. Budget Advisory Committee Pension Reform Report Page 37 • POLICY STATEMENT: There shall be an experience study of each of the City's pension plan's actuarial assumptions performed by an actuary that is independent from the pension board. The experience study should, be conducted at least once ever,y,Ah ee {3J> years, to compare actual experience to the assumptions. The independent actuplyhpff - make recommendations for any changes in assumptions based oh"5-the results of Ffi�e `� �t experience study, and any deviations from those assumptions bykthepension board shill{ be justified to the City Commission. • POLICY STATEMENT: Once pension reform is implemented, a 5 /T 'vote of the City Commission should be required for any further pension changes. r� A Appropriate Benefits to Provide to Employees ' N v 1 � • POLICY STATEMENT: The City of Miami Beach should stnve toUprovide a retirement benefit that provides for a replacement of salary at a level at east equivalent to Social Security plus a supplemental retirement benefit. • POLICY STATEMENT: The City of Miami Beach retirement benefits should be „adtUded periodically after retirement to reflect the impacts ofinflat+on, with rates no mate, an the Consumer Price Index for All Workers CPI(W) thi]t is sufilecf” to C, I& Commission approval and with a maximum of 3 percerfi c h' 6811y. Recruitment and Retention R • POLICY STATEMENT The City of Miami Beacsffau {d strive to provide retirement benefits that ensure that the City`rs competitive in th ri cr uifinent and retention of employees. > �xi� � r ff Management of Rssk /Risk Shanng • POLICYk�STIATEMENT: The City of Miami each should strive to share some portion of retire&Wbenefit risk with employees. n : • GUIDELINE" _STATEMENT: If the City's cpntnfution to a defined pension benefit plan exceeds 25 percent of payroll for genera{ employees and 60 percent of payroll for high. risk employees; the employee contnbution should be reviewed. Budget Advisory Committee Pension Reform Report Page 38 t - .. 7. OPTIONS EVALUATED tDeleted 6 , Formatted IN . , +n Based upon the direction of the Mayor's Charge, as well as the condition of both Mans, the: Budget Advisory Committee (BAC) focused on recommending changes 46 the. Fire and Police' , Pension Plan. Below are specifics on each of the options evaluated for th6', and Police Pension Plan; including a table summarizing the results of the projected cost impact of each Each of .. _ I' these options was evaluated on a macro level, as well as on a micro level as to their im acts one Deleted: Were p the three aforementioned employee groups (i.e., vested, non - vested and new hire ;employees). .- , The options that changed retirement benefits from the current plan to another plan were evaluated for new employees and for new and non - vested employees. These options u, e converting�,to the Florida Retirement System (FRS), converting to a defined contribution plan 'and converting taa hybrid plan. N� The options that evaluated changes in benefits for under the current defined benefit plan were = -4 evaluated for new employees and for all employees that have not yet reached normal, retirement age. K� ' Legal note: City of Miami Beach employees who oin e Miami Beach ension., laa si 9 ry th I P n R � 9 individual t ontracts,..__which state that the benefits cannot be reduced ,Whether these contracts_ _ Deleted: contracts Which _ - - - -- _......- - -- - - - - -- - -- would prevail' over changes implemented through the collective bargaining pracess`is a potential legal' issue that would likely result in litigation � recommended approach to Implement this option is to incentivize existing employees to volunt' ly sign new contracts by offering them alternative reductions in other items not gover{ted5�y,the individual pension contract(e.g. salary ; z and /or non - pension benefits). B. FRS + Social Seauii'� "M 1 Issues to Considers Reduced oh Al cover time (FRS kelygoing up) .� Favorable� contribuhon ate (FRS °contribution i s 3 %J_ City must join Social Security as a p difi"n' f joining FRS x Standardized FRS benefits Portability easier for City to attract employees from other FRS agencies (but also easier for other FRS agencies to hire employees away) • City still must pay off current plan Itabtltties and may have to shorten amortization - penod, thereby Increasing cost In the short-term Lose premium tax revenues Immediately • State legislature sets benefits and ,contributions (i.e., City loses control of benefits and contributions) Budget, Advisory Committee, Pension Reform Report Page 39 Legal note: The FRS statute requires that when a city joins FRS, all active members of the city pension plan be given an opportunity to individually elect to join FRS or continue participating in the city plan. The city would not be able to force non - vested employees to join S RS. It is possible to achieve this result by freezing benefits under t Deleted: FRS.. non vested employees before joining FRS but this could lead to Social SecuXlfYissues Deleted: , but These issues are probably resolvable, but would be complicated 4 to work out The � - __.__.._._._.. _ _ _ . __ -.. _ .. .... recommended approach to implement this option is to loin FRS for new hires whtie providing current employees with the option to elect either to stain the city pjan #or to join e l e ted edfae( elect FRS. Future benefit accruals under the city plan, could be redueed to encourage more t current employees to move to FRS. �2 The BAC requested that this option be evaluated, separately based�on the option being applied to: R A. New employees, and �z B. Non - vested existing employees OEM - - - - - -- � Norm Ret Date ` /age 60 w/8 yrs� �JS o Agee ; O Yrs tf mg, Deleted: Age 55 w/6 rs or 25 YOS or Age ?� 52 w/25 Yrs include military: Hired offer `711111 , CC+LI� NOne� a ` Deleted: for benefits earned after 7 — Z�" P $hare PI No 1r11 Deleted: as of 711 /1 1 4s p ..-----...:1 119 extyear) .. ._..- -- ..._...._� Deleted 14 5 % n p xrlfftt►l A IR, r 4 K,.✓a�°"� £^I P � �£ ,�/' iY # iii £ F_�.v''F ..... _.._........ _._..._.._ Total Cost Deleted: 17.1% (22.5% next year) El Sp $pCICli� i Urlt)/�, �iF3:£ :... f tsar � ��,s'" ',*�`''zs✓w il � x * Changes implemented 71 1 /1 1 subject to litigation Budget Advisory Committee Pension Reform Report Page 40 Results: This option results in a normal cost equivalent to approximately 25 percent of projected payroll, with a net present value of savings of approximately $22 million for only new employees and approximately $51 million for both, new and non- vested employees over; ' the next 30 years. r IL Defined Contribution + Social Security equivalent controbutio This option eliminates the City's risk any future benefits earried €The opfion could be implemented by participating in social security and having an adchhoal defined contribution . pr . Ponen_t,_ that together total to 24 percent as explained below, or by a Deleted: component defined contribution of 24 percent. Issues to Consider: x E r = • Predictable employer costs— this is the standard pension In the private sector. r • City does not bear investment risk — however, employees &j ` all c" a particular concern since if the City does not participate in Soc al Security under thltbptlon Appeals to younger, mobile employees • Portability — defined contribution account bolancef may be dolled over`' to anIRA or other retirement plan with another employer "'• • Lower administrative costs • No actuarial liabilities - Employees beargAnvestment risk and reward Possible that defined contribution benefits wlll' run out while employee is std[alive • No inflation protection (Retiree CQLA{ Loss of premium tax revenues for Fiiek d Police Plans • Investment costs are higher for indtandual employees than for a pension plan • Benefit would have to exceed Social `'Secuntyto'be competitive The amount of the City s<annual required contri 'ti' n ;would be equivalent to the FRS amount ofy17 patent =empiayercantrlbution #or tf a FJZS Investment plan for high risk employees plus: an additional',,, ven (7) percent for a social Security equivalent, thus representin g o total employer contrlbuhon of 24 percent, along with an employee contttbuttor% =of three (3) percent plus a Social Security equivalent of approximately six (6) percent fora total employee contributiorllof nine (9) percent. The BAG requests' that this option be:'evaluated separately based on the option being applied to A. New employees and B. Non - vested extshn`gfemployees t k Budget Advisory Committee Pension Reform Report Page 41 Results: This option is designed to be similar in cost to FRS and thus results in a normal cast ;�, equivalent to approximately 25 percent of projected payroll, with a net preset value of , savings of approximately $22 million for only new employees and ME million for both, new and non - vested employees over the next 30 years � III. Hybrid Plans M YAA t - These options reduce but do not fully eliminate the City's risk for any future "benefits earned. I'M , Issues to Consider: • Reduced cost over time P�x • Sharing of risk between City and employees x • Defined benefit base plan — guaranteed benefit i • Defined contribution plan on top of defined benef,440an • Continuation of premium tax revenues for Fire and Police Plan requirements - of F S. 175 and 185 are met .... -- ... -- .__..._. - - -- .. _._ . - - - - - -- Deleted' < # >Social Security issue¶ The BAC requested that this option be evaluated separately based on the, option being applied to: 1. New employees, and 2. Non - vested existing employees s . A. Replace one -half (1/2) of the multiplier (1 and? /z percent for the first 20 years and 2 percent therafter with a defined ti Ion that provides matching requirements based onian actuanally equivalent`ralUe Jhe normal cost as of the t r 10/i/ V" raluatto`n�was 32 5Q percent, resultng m'; an , ct arially equivalent value of 16 3'per�cent'as the City's contrrbu�h nY The employees would continue to have pid n efied benefit with a multiplier of 1 and %z �percentfor the first 20 years and 2 percent thereafter. B. Replace one third of the multiplier (11 ercent for the first 20 years and 1 and 1 /3 percent thereafter) ,with a defined - , plan that provides matching requirements based on an actuarially quivalent value. The normal cost as of the 10/1/10 valuation was 32 59 percet t, resulting in an actuarially equivalent value of 10.86 percent as "flteCtiy's`contrtbtition. The employees would contnue: " have a defined benefit with a multiplier of 2 percent for the first 20 years and 2 a' 2/3 percent thereafter. Budget Advisory Committee Pension Reform Report Page 42 C. Provide a defined benefit component equivalent to the minimum benefits for Police and Fire to receive premium taxes from the State as defined by F.S. Chapterl 75 /185 (see Option V for additional details) and a defined .contribution .component so that th& City's total normal costs are similar to FRS, resulting in a defined!,-contnbufion component of 17.46 percent funded by the City.` b D. Provide a defined benefit component equivalent to the mimmum forAPoltce and Fire to receive Premium Taxes from the State as defined byiF S7Chapter175 /185 Option V for additional details) and a defined contrbution componentf 12.46yy percent funded by the City (with employees providing a 5% contnbuha6 e defined benefit plan and a matching contribution of 5 percent - to the defined contribution component). The amount of employee match for the defined contribution plan; can be _... -- - . determined jn collective bargaining peaotiations, as it will not impacf the Clty`s eo'st Deleted. be determined � . negotiations ations Results: Options A and B are designed to simply be a 'substitutior o(defined benefits with defined contributions without significantly impacting cost but substantially reducing risk, therefore the cost .impacts for these are minimal.. In other words, the results Aare praofteally the same as the current defined benefit plan, but the ns6 eliminated' 211APriv W. Options C and D result in a range of normal ost equivalents that range between 20 and c 25 percent of projected payroll, with a netpresent value savingsi 30 year ranging .between $T8 million and $37 million j aplte to new employes ra�fy, an'd between Deleted. for only _.._ - .... --- - . NIM $43 million and $74 million if appli both new and non vested cUrrertt employees r Deleted: for both •_ - _ 1 Deleted: over 30 years . t IV. Changes to the Existing Pension Phan Past Service /Future Service Approach With a Combined Benefit )� 3 Issues taC�nsider Reduced cost' over time . more significant�if changes are made for all employees) S Can be designed to keep premium tax revenues -but requires agreement of union Doe ii to deal with the risks the City assumes Potentia{ tterns previously identified by the "City's Actuary as being the most significant drivers of cost proposed for ei#ber yO 1. New employeesand those employees have not yet vested in the retirement plan (less than 10 yearsof service, aid 2. All employees who have no yetreached normal retirement age (Rule of 70). �., - A. Multiplier: Reduce to "3 percent (consistent with FRS but, FRS also has Social' Security); Budget Advisory Committee Pension Reform Report Page 43 B. Multiplier: Reduce to 2 percent (consistent with F.S. 175/185 minimum); C_Final Average Monthly Earnings (FAME): Highest 5 of last 10 years (consistent with F.S. 175/185 minimum and FRS) D. �etree cost of Itwng, ad(ustment (CGLA) Reduce to 1.5 percent (coISi� tent Wttf Moved (insertion) [1] general employees „.hired after 10J1 „f 10 in the General �ioyee Ret Plan MBER,P) - ag E Retiree COLA: Reduce to 0 percent (for pros taecttvely earnedbeneftts consistent with FRS); F Change Normal Retirement Age: Age 55 with 10 ve rs of sarvlCe o> age 52 with 25 years of service (consistent with F.S. 17511 8S” mintnzum and FRS); Beneficiaries: Change benefit to be consisten w ith FRS benefit and ” x G Employee Contributions: Increase by 2 percent. rU 0 i Deleted: < # >Change Normal Retirement ■ " Age: Age 55 with 10 years of service or Results: age 52 with 25 years of service K£ (consistent with F.S. 175 1185 minimum The costs impacts vary significantly for each of the poterfaf components as shown below and FRS) < #>Retiree cost of living adjustment z (COLA(: Reduce to 1.5 percent (consistent Net Present Value _ i with general employees hired after $avin 5 � In ; 10/1/10 in the Generol Employee g Retirement Plan - MBERP);Q $millions aver 30 .ears) rs i < # >Retiree COLA: Reduce to 0 percent Normal Cost All Employees & (for prospectively earned benefits NeW s consistent with FRS);¶ ExceptzT�iosreat > " ¢ a < # >Beneficiaries: Change benefit to be Employees NOrma�� consistent with FRS benefit ondl( s Retlrerpgj }�" I < #> Employee Contributions: Increase by A 28.67% 19 5� 34.4 2 percent.Q B 19.41% _ 771' "'_ 107.9 Moved up [1]: <# >Retiree cost of livin i (COLA): Reduce to 1.5 percent (consistent C 29.17 1, 19.8 with general employees hired after p j 10 /1 /10 in the General Employee [� 28 1 0 23 7;= 45 Retirement Plan - MBERP) ¶ 53.7 l Q b ," i < #>Retiree COLA: Reduce to 0 percent 27 ` 29.8 �� (for prospectively earned benefits r �¢, c - consistent with FRS);¶ 2$.97 JAR 17.13Q "1 < # >Beneficiaries: Change benefit to be 29.57% 15.7 consistent with FRS benefit; and¶ r < #> Employee Contributions: Increase by 2 percent:¶ Furthi same of the options are mutually exclusive, and the Impacts of all options are - - - - -- -- ---------------- - " - - -- mterrelatedAny, recommendations willtherefore need to be evaluated as a group in Deleted t ff order 6"dete mine cost impacts x 4 � V Budget Advisory Committee Pension Reform Report Page 44 V. Changes to the Existing Pension Plan — "Freeze" Current Plan Ben efits for Past Accruals and Create a "Minimum" Benefits, Plan for Future Service This option reflects the minimum benefits required to receive State premium taxes as (' defined in Florida Statutes 175 and 185 (excluding employees who ave already eat ched Deleted: exempts an normal retirement age). This is essentially the most a City can save while `still continuing to D elete d: is _.... _ receive premium taxes. This option freezes" the past service U enefits based one current 6 { Deleted: at salaries. The a ccrued benefits do not continue to grow as salanesI' 'base ' • Retiree COLA Reduce to 0 percent (for benefits based on' ,- ;future seryrce consistent Deleted prospectiv earned Deleted with FRS); I . • Multiplier: Reduce to 2 percent per year for future service • FAME: Highest 5 of last 10 years • Change Normal Retirement Age: Age 55 with 10 years of service or age 52 wrth25 years of service; • Share Plan: Use 100% of future Chapter /185 premium tax revenue towards ( Deleted: share plan benefits provided by the defined benefit pension plan frequrres union` dgreementl • Beneficiaries: Change automatic spousal benefit 1, y, "ear certain benefit and allow members to purchase other survivor options; and Deleted: +spousal annuity Riiy • Employee Contribution: Reduced from 10 percent to 5 percent Results: s g This option results in a normal cost equivalen�to`approximatelyl2 percent of projected payroll, with a net present value of savings of approximately $1 b7 mtllto�nV *f applied to all t Deleted: for new and existing employees who have not4et ,reached normal retirement age, over 30 Deleted: all years. It is important to note that thi 's a IoW normal cost for a plan for i h - nsk Deleted: high risk - - -Q: -- - - - -- - - employees that do not include Social Security - -- D eleted: , emp that does m VI,, Changes to Exlstung' PI n Package bf Iteims Incorporated Into the Collective�Bargaining Age`er»erifslln 2010: (Se e�tsf:FSelow) " • AIL Employees k • No retiree COLA for at least Zyears of 5 -Year Deferred Retirement Option Plan (DROP) period (Years 3 dnd 4 of DROP) for participants entering DROP after 9/1/12; and «�Offdtlty compensation pensionable and Sick Leave self back up to the averff me compensationxcap , •. New Employees Orily , • Minim miehrement age of 48 for Rule of 70; • Pushed back thaeYmcre6se in multiplier from 3 percent to 4 percent so that, the multiplier irerea`se from 3 percent to 4 percent occurs in year 20 instead of year 15; • FAME increased from 2 to 3 years; and Budget Advisory Committee Pension Reform Report - Page 45 • Retiree COLA decreased from 2.5 percent to 1 .5 percent. Results:, This option results in a normal cost equivalent to approximately 23 $ercent of prolectetl payroll, with a net present value of savings of approximately$33milhon sfornevr employees, over 30 years. In 2010, Buck Consultants, the actuary trx for the Fire and Police Pension Plan, estimated the impacts to existing employees to bemtmmal g I All RRF 4'. t fg E Additional Policy Changes The following were additional policy changes discussed by the Committee that could be, ` implemented without the need for additional actuarial analyses: x t w • Use 100% of 175/185 share plan monies towards benefits provided by the defined benefit pension plan qui • Eliminate the provision that allows for transfer of years of service'. fromMrami Beach Employee Retirement Plan (MBERP) to Fire and Pohce�Pension Plan (proposed by Fire and Police Pension Plan Administration) era Al • Change purchase of service provisions to be based on'full actuarial costs (Government Deleted provisions Finance Officers Best Practice and Advisary,Papers o Penstan Reform) • Eliminate the use of sick and vacation N cstrrs that are urre�tly ed to increase "pensionable pay' required v ll • Reduce the amount of annual oveihmpgg included in _p k n - earnings to a I _ Deleted: use of maximum of 300 hours_ 128 refired l 201 E °k r Y;f '4 s c R �r r . P� Budget Advisory Committee Pension Reform Report Page 46 i o c o 0 0 0 ° o z a m o c c m o o o z m Q c w F « a v m CL z m °rv° o o v p O �O - m z m c Q t + V p m o p— A N m' N N E > a o o C m rtat u u v c y o m o' -° ry v- n Z i Q a m m y ~ N ` E 16 o vi .2 - .a v `o O v ca u � N Z lD N N N O W + m 'O o O z w o o u y N y m tl1 p in C u m m m l0 ry - Z m m O m O W m N^ 2> Q V N N O b o u O Z c o n F Q v 5 s o cr' O1 E f a v_ n O w 8 o N ° o °o > Z z z In w o L m n m a . W - 3 C u. n W J - O m A c v _ w O - Z. E o OC ry o v c u o oC W W W m ° s w W p � j 'o p .. LL c Z. IZ E Z� 3 n v Z F. y o 1� O u `� m 2 �' v `c o o c F F - c o o F v v v i u 3 a v 1 O m o c m v o c o ° m o u _ a o c a LL. N •n v w 1O o o y o o A ,� v o ow W m F L Q O p Z O U V V \' ` .O vl 00 =N m O H C h p n IA O t CO O O d p p _ m m •'• « C `- - O V N ^ t ' �. 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E_ v o v u "o `_' "' o'— u m u co � Z o Z <° O Z< u n i� APPENDICES Detail of Actuarial Studies DRAFT REPORT Table of Contents Section 1 - Option IA: Florida Retirement System +Social Security (24 %) for New Employees Section 2 - Option IB: Florida Retirement System +Social Security (24 %) for New and Non- vested Existing Employees Section 3 - Option IIA: Defined Contribution +Social Security (24 %) for New Employees Section 4 - Option IIB: Defined Contribution +Social Security (24 %) for New and Non - vested Existing Employees Section 5 - Option IIIA1: Hybrid Plan (1.5 %/2 %) with 16% DC for New Employees Section 6 - Option IIIA2: Hybrid Plan (1.5 %/2 %) with 16% DC for New Employees and Non - vested Existing Employees Section 7 - Option IIIB1: Hybrid Plan (2 %/2.66 %) with 10% DC for New Employees Section 8 - Option IIIB2: Hybrid Plan (2 %/2.66 %) with 10% DC for New Employees and Non - vested Existing Employees Section 9 — Option IIIC1 - Hybrid Plan (Chapter Minimum with 5 %.Employee Contribution) with 17.46% DC for New Employees Section 10 — Option IIIC2 - Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 17.46% DC for New Employees and Non - vested Existing Employees Section 11 — Option IIID1 - Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 12.46% DC for New Employees Section 12 — Option IIID2 - Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 12.46% DC for New Employees and Non - vested Existing Employees Section 13 - Option IVA1: Change Existing Plan to 3% Multiplier for all FS, Vested Employees Grandfathered Section 14 - Option IVA2: CHange Existing Plan to 3% Multiplier for all FS, Employees Eligible for NR Grandfathered Section 15 - Option IVB1: Change Existing Plan to 2% Multiplier for all FS, Vested Employees Grandfathered Section 16 - Option IVB2: Change Existing Plan to 2% Multiplier for all FS, Employees Eligible for NR Grandfathered Section 17 - Option IVC1: CHange Existing Plan to FAME High 5 for all FS, Vested Employees Grandfathered Section 18 - Option IVC2: Change Existing Plan to FAME High 5 for all FS, Employees Eligible for NR Grandfathered Section 19 - Option IVD1: Change Existing Plan to 1.5% COLA, Vested Employees Grandfathered Y Conc ots Section 20 - Option IVD2: Change Existing Plan to 1.5% COLA, Employees Eligible for NR Grandfathered Section 21 - Option IVE1: Change Existing Plan to No COLA, Vested Employees Grandfathered Section 22 -Option IVE2: Change Existing Plan to No COLA, Employees Eligible for NR Grandfathered Section 23 - Option IVF1: Change Existing Plan to 55&.10 or 52 &25, Vested Employees Grandfathered Section 24 - Option IVF2: Change Existing Plan to 55 &10 or 52 &25, Employees Eligible for NR Grandfathered Section 25 - Option IVG1: Change Existing Plan Normal Form to Life Annuity, Vested EE's Grandfathered Section 26 - Option IVG2 Change Existing Plan Normal Form to Life Annuity, EE's Eligible for NR Grandfathered Section 27 - Option IVH1: Increase Existing Employee Contributions by 2 %, Vested EE's Grandfathered Section 28 - Option IVH2: Increase Existing Employee Contributions by 2 %, EE's Eligible for NR Grandfathered Section 29 - Option V: Chapter Minimum- Freeze Current Plan Benefits, Implement Chapter Minimum Benefits Plan for all Future Service, Grandfather all Employees Eligible for NR Section 30 - Option VI: Reformed Plan for New Employees: Minimum Retirement Age 48, 4% multiplier after 20 years 3 year FAME, 1.5% Retiree COLA -_ Cons Pt�s . 1 -1 Section 1 Option IA: Florida Retirement System +Social Security (24 %) for New Employees Miami Beach Police & Fire Plan Projected Cost in.Dollars Option IA: Florida Retirement System +Social Security (24 %) for New Employees 75, 000, 000 _.__.._.__..__.-----.--._.._..___..___ ............._.__.__......_----:.._...._...._........ .._......._._._..._...... __ .......... _._._ __._...___..._._...._.._- - - -.._ ._...........__._...... _._ ...... ___.._ ----- .__........... _ .... _, ...... ._ .... ................. _.._..--- _.._......_._ 70,000,000 65,000,000 60, 000, 000 55,000,000 50,000,000 45,000,000 -- ... ___ ................. _ ....... ... .......... .:..___.: .- .......... _.._ ...... _ .... _ .. _..__--- ----- _--------------- ----- ._- .____...._....__._._ _.._..:__....__ _.- .... _ ... _.:................... 40,000,000 ___..._ ....... .... ... _ ....... ........_.._ 35,000,000 -._ ---------- .._._..._ .................._..._...._._..._...._.__..._.._...___..___...__._......._..._......... ._....._.._.._....___.._____ -._ _'__......._.._ _____._..___...__.__..:..---.--...._._._._..__......_...---__._.._..........._.___.__...._._....._..--.-.--..._._.....- 30,000,000 — 25,000,000 10 11 12 13 14 15 16' 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 —Current Plan Cost (incl. expenses & Buyback) -$ Option IA -$ - - - - C®ncpts 1-2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IA: Florida Retirement System+Social Security (24%) for New Employees 80% 75% ------ . . .... .. . ............... 70% 65%. 60 55% . . ....... . !.�� .. . ....... . 50% 45% 40 % . .... ....... . . . .... . .. - - - - -- . .. . ........................ ..... ........ ..... ------ ... ... . ........ ..... ........ . .. . .. . ...... . .... ...... . ... --- ---- — . . . ... . ........... . .......... .. . .... . .... .... '35% 30% 25% 20% 10 11 12. 14 15 16 17 18 19 20 21 22 23 24. 26 27 28 29 30.31 32.33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback)-% OptibnlA-% Conc e* ts 1 -3 Option IA: Florida Retirement System +Social Security (24 %) for New Employees Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IA -$ Option IA -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 35,559,519 74.39% (120,456) (120,456) 2011 37,226,360 75.25% 37,293,728 75.38% (67,368) (62,262) 2012 37,981,309 74.18% 37,944,846 74.10% 36,463 31,146 2013 38,660,638 72.95% 38,468,359 72.59% 192,279 151,792 2014 40,013,760 72.95% 39,654,486 72.29% 359,274 262,130 2015 41,414,242 72.95% 40,893,091 72.03% 521,150 351,420 2016 42,863,740 72.95% 42,183,979 71.79% 679,761 423,636 2017 44,363,971 72.95% 43,518,681 71.56% 845,290 486,872 2018 45,916,710 72.95% 44,876,659 71.30% 1,040,051 553,652 2019 47,523,795 72.95% 46,224,799 70.96% 1,298,996 639,091 2020 49,187,128 72.95% 47,603,208 70.60% 1,583,920 720,213 2021 50,908,677 72.95% 49,031,793 70.26% 1,876,884 788,747 2022 52,690,481 72.95% 50,529,248 69.96%. 2,161,233. 839,410 2023 54,534,648 72.95% 52,105,048 69.70% 2,429,600 872,128 2024 56,443,360 72.95% ' 53,710,919 69:42% 2,732,441 906,503 2025 58,418,878 72.95% 55,347,114 69.11% 3,071,764' 941,844 2026 60,463,539 72.95% 57,064,064 68.85% 3,399,475 963,331 2027 62,579,763 72.95% 58,835,864 68.59% 3,743,899 980,530 2028 64,770,054 72.95% 60,642,991 68.30% 4,127,064 998,965 2029 67,037,006 72.95% 62,479,597 67.99% 4,557,409 1,019,530 2030 69,383,301 72.95% 64,402,151 67.71% 4,981,151 1,029,875 2031 69,868,207 70.98% 64,461,469 65.48% 5,406,738 1,033,149 2032 70,122,087 68.82% 64,270,583 63.08% 5,851,504 1,033,398 2033 66,721,958 63.27% 60,489,234 57.36% 6,232,724 1,017,304 2034 62,987,707 57.71% 56,395,736 51.67% 6,591,972 994,400 2035 65,472,079 57.96% 58,601,035 51.88% 6,871,044 957,946 2036 65,058,318 55.65% 57,926,472 49.55% 7,131,846 918,953 2037 63,213,581 52.24% 55,823,595 46.13% 7,389,986 880,050 2038 58,980,901 47.09% 51,332,265 40.99% 7,648,636 841,823 2039 45,863,374 35.38% 37,947,036 29.27% 7,916,338 805,256 2040 42,349,557 31.57% 34,156,148 25.46% 8,193,410 770,277 Total APV 22,030,653 Concepts 2 -1 Section 2 Option IB: Florida Retirement System +Social Security (24 %) for New and Non - vested Existing Employees Miami Beach Police & Fire Plan Projected Cost in Dollars Option IB: Florida Retirement System +Social Security (24 %) for 75,000,000 _. ......_ ... ......... ..._...:_... New and Non - vested Existing Employees .......... ............................ ....... _................_........ _.._ ...... ._... _................... _ .... _...._ 70,000,000 _ _._ _ ___ 65,000,000 60,000,000 ..............._.........................._:......._......._............_................__.........................................._....._........_........................._....__.._...-.. ..._..,.._.._........_...__.... 55,000,000 _...._.- .__ ---- _ _.._.........._.._..__..___.___ _....._._:_._...._ ..._,_......,._._ __. .......... _____ 50,000,000 - ....... _._........ _.__._._e..,....__........---...:.-..--- ... .-_.... _- .. ............ .__..__..._.__. ._ _.....__... _ ....... - _..._........ -_ ............................. -__ ................. ....._.._............ ...._ .. ............... 45,000,000 40,000,000 E 35,000,000 30,000,000 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (ind. expenses & Buyback) -$ OptionIB -$ Conce 2 -2 Miami Beach Police Sr Fire Plan Projected Cost in Percentages Option IB: Florida Retirement System +Social Security (24 °0) for 80% New and Non = vested Existing Employees 75% �— u, 70% 60% 55 % . .... ... ............. ... ... .......... _-- ..___.. -_.___....._._......... ......... __ ....... __ ....... _ ........... __........................ --- ._._._........ _ . _........ ._ ___......... _ ...... _._.._._.._.__......._..__ ; ..._.._._.._...._._..`a -- ... - ._.... -- ...... 50% 45% 40% 35% 30% -...._.___.___._.__...__--..____..___._....___...._._.__..__.........._._...._..._._....._..._..._....._._.._.__.____..-_.....-_ ----------------------- ---- ._ ........ __.._...,..._..._.__._.._._.__......._._ _.._..._____..._._.....___ ----- . 25% — 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 - -Current Plan Cost (incl. expenses &-Buyback) -% OptionlB -% ' 2 -3 Option IB: Florida Retirement System +Social Security (24 %) for New and Non - vested Existing Employees Current Plan Cost Current Plan Cost Present Value (incl.. expenses S (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IB -$ Option IB -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 33,612,185 70.32% 1,826,879 1,826,879 2011 37,226,360 75.25% 35,258,369 71.27% 1,967,991 1,818,846 2012 37,981,309 74.18% 35,820,049 69.96 %° 2,161,260 1,846,088 2013 38,660,638 72.95% 36,260,618 68.42% 2,400,020 1,894,668 2014 40;013,760 72.95% 37,361,347 68.11% 2,652,413 1,935,228 2015 41,414 72.95% 38,512,858 67.84% .2,901,384 1,956,451 2016 42,863,740 72.95% 39,715,055 67.59% 3,148,685 1,962,301 2017 44,363,971 72.95% 40,962,964 67.36% 3,401,007 1,958,920 2018 45,916,710 72.95% 42,231,195 67.09% 3,685,515 1,961,914 2019 47,523,795 72.95% 43,496,664 66.77% 4,027,131 1,981,301 2020 49,187,128 72.95% 44,794,698 66.43% 4,392,429 1,997,249 2021 50,908,677 72.95% 46,146,149 66.12% 4,762,528 2,001,417 2022 52,690,481 72.95% 47,572,655 65.86% 5,1.17,826 1,987,735 2023 54,534,648 72.95% 49,080,189 65.65% 5,454,458 1,957,930 2024 56,443,360 72.95% 50,672,140 65.49% 5,771,221 1,914,635 2025 58,418,878 72.95% 52,312,751 65.32% 6,106,127 1,872,220 2026 60,463,539 72.95% 54,035,571 65.19% 6,427,968 1,821,535 2027" 62,579,763 72.95% 55,867,606 65.13% 6,712,156 1,757,918 2028 64,770,054 72.95% 57,818,725 65.12% 6,951,329 1,682,586 2029 67,037,006 72.95% 59,842,380 65.12% 7,194,626 1,609,497 2030 69,383,301 72.95% 61,936,864 65.12% 7,446,438 1,539,584 2031 69,868,207 70.98% 62,161,144 63.15% 7,707,063 1,472,707 2032 70,122,087 68.82% 62,145,277 60.99% 7,976,810 1,408,736 2033 66,721,958 63.27% 58,465,960 55.44% 8,255,999 1,347,543 2034 62,987,707 57.71% 54,442,749 49.88% 8,544,959 1,289,008 2035 65,472,079 57.96% 56,628,047 50.13% 8,844,032 1,233,016 2036 65,058,318 55.65% 55,904,745 47.82% 9,153,573 1,179,456 2037 63,213,581 52.24% 53,739,633 44.41% 9,473,948 1,128,223 2038 58,980,901 47.09% 49,175,365 39.26% 9,805,536 1,079,215 2039 45,863,374 35.38% 35,714,644 27.55% 10,148,730 1,032,336 2040 42,349,557 31.57% 34,156,148 25.46% 8,193,410 770,277 Total APV 51225,419 conc . - 3 -1 Section 3 Option IIA: Defined Contribution +Social Security (24 %) for New Employees Miami Beach Police & Fire Plan Projected Cost in Dollars Option IIA: Defined Contribution +Social Security (24 %) for New Employees 75,000,000 :._............__....... 70,000,000 65,000,000 _ ................. ...:........................... ......_.............. 60,000,000'.. ._ ......................._....._..._ ......... .......... _........ _............._.........__................... ................... .._... ........_. ... ................._ .. .................._...._.._.... 55,000,000 _._ .............................._. ..........:...__....._......._. _ .. 50,000,000 45,000,000 40,000,000 ` 35,000,000 30,000,000 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33'34 35 36 3738 39 40 Current Plan Cost (incl. expenses & Buyback) -$ Option IIA -$ 3 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IIA: Defined Contribution +Social Security (24 %) for New Employees 80% �. -. Ir 70% 65% - - - -- — __ .. — _.._........ . - ... - .....:_ . ._ .. ...... ..__ . ._. - -- -- - _..._... ._... 60% 55% 50% -- b o 45% ` 30 % ... .._ .............._........ ... _ ................___.... ... ._..__... ........... :........... _.............._...._._.._.:....._._..... ...... _ .......................... .............. _ ...... ._ ............ _............ ............ _ ............ ......._.__..............._ ................... _.._ ............. _.._ ....................... ..........._. ............. _ ... ............__ ..........'°" . .................. ....__.._........._._.............. ....... .._._.__.................. _ .................... .................. _............. 20% 10 11 12 13.14 15 16 17 18'19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 —z-- Plan Cost (incl. expenses & Buyback) % Option IIA -% 3 -3 Option HA: Defined Contribution +Social Security (24 %) for New Employees Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IIA -$ Option IIA -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 35,559,519 74.39% (120,456) (120,456) 2011 37,226,360 75.25% 37,293,728 75.38% (67,368), (62,262) 2012 37,981,309 74.18% 37,944,846 74.10% 36,463 31,146 2013 38,660,638 72.95% 38,468,359 72.59% 192,279 151,792 2014 40,013,760 72.95% 39,654,486 72.29% 359,274 262,130 2015 41,414,242 72.95% 40,893,091 72.03% 521,150 351,420 2016 42,863,740 72.95% 42,183,979 71.79% 679,761 423,636 2017 44,363,971 72.95% 43,518,681 71.56% 845,290 486,872 2018 45,916,710 72.95% 44,876,659 71.30% 1,040,051 553,652 2019 47,523,795 72.95% 46,224,799 70.96% 1,298,996 639,091 2020 49,187,128 72.95% 47,603,208 .70.60% 1,583,920 720,213 2021 50,908,677 72.95% 49,031,793 70.26% 1,876,884 788,747 2022 52,690,481 72.95% 50,529,248 69.96% 2,161,233 839,410 2023 54,534,648 72.95% 52,105,048 69.70% 2,429,600 872,128 2024 56,443,360 72.95% 53,710,919 69.42% 2,732,441 - 906,503 2025 58,418,878 7195% 55,347,114 69.11% 3,071,764 941,844 2026 60,463,539 72.95% 57,064,064 68.85% 3,399,475 963,331 2027 62,579,763 72.95% 58,835,864 68.59% 3,743,899 980,530 2028 64,770,054 72.95% 60,642,991 68.30% 4,127,064 998,965 2029 67,037,006 72.95% 62,479,597 67.99% 4,557,409 1,019,530 2030 69,383,301 72.95% 64,402,151 67.71% 4,981,151 1,029,875 2031 69,868,207 70.98% 64,461,469 65.48% 5,406,738 1,033,149 2032 70,122,087 68.82% 64,270,583 63.08% 5,851,504' 1,033,398 2033 66,721,958 63.27% 60,489,234 57.36% 6,232,724 1,017,304 2034 62,987,707 57.71% 56,395,736 51.67% 6,591,972 994,400 2035 65,472,079 57.96% 58,601,035 51.88% 6,871,044 957,946 2036 65,058,318 55.65% 57,926,472 49.55% 7,131,846 918,953 2037 63,213,581 52.24% 55,823,595 46.13% 7,389,986 880,050 2038 58,980,901 47.09% 51,332,265 40.99% 7,648,636 841,823 2039 45,863,374 35.38% 37,947,036 29.27% 7,916,338 805,256 2040 42,349.557 31.57% 34,156,148 25.46% 8,193,410 770,277 Total APV 22,030,653 4 -1 Section 4 Option IIB: Defined Contribution +Social Security. (24 %) for New and Non - vested Existing Employees Miami Beach Police & Fire Plan Projected Cost in Dollars Option IIB: Defined Contribution +Social Security (24 %) for New and Non - vested Existing Employees 70;000,000 65,000,000 60,000,000 55,000,000 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 . 10 11 12 13 14 15 16 17 18 19 ~20 21 22 23.24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ Option IIB-$ - - - - Conn Fts 4-2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option ITB: Defined Contribution+Social Security (24%) 80% for New and Non-vested Existing Employees ........... . .. . ......... 75% . ....... 70% 7 d . . . ................. . ....... 65% . . . ....... .... ....... . ............ . ........... . ........ . ...... ....... . .......... ............. ... . ....... . . . ........ . .... ........... 60% 55% 50% lY 45% 40% 35% . . .... .. ..... ... ... . . ...... . ... ... . ....... . .. ....... ............ . . . .. .............. ........ ... vllllk'�_ 21, 30% 25% . ...... . ...... .... ................................... ...................... . ................. . . ....... . .......... . ..... . ......... . .. . ...... . ........... . ............ . . ...... ..... . ........ 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 Current Plan Cost (incl. expenses Buyback)-% —0ptionIIB-% Conc e*-L;Lb 4 -3 . Option IIB: Defined Contribution +Social Security (24 %) for New and Non- vested Existing Employees Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IIB -$ Option IIB -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 33 ;612,185 70.32% 1,826,879 1,826,879 2011 37,226,360 75.25% 35,258,369 71.27% 1,967,991 1,818,846 2012 37,981,309 74.18% 35,820,049 69.96% 2,161,260 1,846,088 2013 38,660,638 72.95% 36,260,618 68.42% 2,400,020 1,894,668 2014 40,013,760 72.95% 37,361,347 68.11% 2,652,413 1,935,228 2015 41,414,242 72.95% 38,512,858 67.84% 2,901,384 1,956,451 2016 42,863,740 72.95% 39,715,055 67.59% 3,148,685 1 2017 44,363,971 72.95% 40,962,964 67.36% . 3,401,007- 1,958,920 2018 45,916,710 72.95% 42,231,195 67.09% 3,685,515 1,961,914 2019 47,523,795 72.95% 43,496,664 66.77% 4,027,131 1,981,301 2020 49,187,128 72.95% 44,794,698 66.43% 4,392,429 1,997,249 2021 50,908,677 72.95% 46,146,149 66.12% 4,762,528 2,001,417 2022 52,690,481 72.95% 47,572,655 65.86% 5,117,826 1,987,735 2023 54,534,648 72.95% 49,080,189 65.65% 5,454,458 1,957,930 2024 56,443,360 72.95% .50,672,140 65.49% 5,771,221 1,914,635 2025 58,418,878 72.95% 52,312,751 65.32% 6,106,127 1,872,220 2026 60;463,539 72.95% 54,035,571 65.19% 6,427,968 1,821,535 2027 62,579,763 72.95% 55,867,606 65.13% 6,712,156 1,757,918 2028 64,770,054 72.95% 57,818,725 65.12% 6,951,329 1,682,586 2029 67,037,006 "72.95% 59,842,380 65.12 7,194,626 1,609,497 2030 69,383,301 72.95% 61,936,864 65.12% 7,446,438 1,539,584 2031 69,868,207 70.98% 62161,144 63.15% 7,707,063 1,472,707 2032 70,122,087 68.82% 62,1.45,277 60.99% 7,976,810 1,408,736 2033 66,721,958 63.27% 58,465,960 55.44% 8,255,999 1,347,543 2034 62,987,707 57.71% 54,442,749 49.88% 8,544,959 1,289,008 2035 65,472,079 57.96% _ 56,628,047 50.13% 8,844,032 1,233,016 2036 65,058,318 55.65% 55,904,745 47.82% 9,153,573 1,179,456 2037 63,213,581 52.24% 53,739,633 44.41% 9,473,948 1,128,223 2038 58,980,901 47.09% 49,175,365 39.26% 9,805,536 1,079,215 2039 45,863,374 35.38% 35,714,644 27.55% 10,148,730 1,032,336 2040 42,349,557 31.57 °o 34,156,148 25.46% 8,193,410 770,277 Total APV 51,225,419 Pik 5 -1 Section 5 Option IIIA1: Hybrid Plan (1.5 %/2 %) with 16% DC for New Employees Miami Beach Police & Fire Plan Projected Cost in Dollars Option IIIAI: Hybrid Plan (1.5 %/2 %) with 16 %DC for New Employees 75,000,000 _.. _.__._......_ ....................._.__._..__..:..........__.. .... _ .... _ ............... .._.......... _....._........ _....._._._ ............................... _.. ..... ........... _ ..... ..._....... _ ...... ....._ ......... `. ..... ._... 70,000,000 65,000,000 60,060,000 — — - - -- — 55,000,000 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 ___...._----- ...___.__ .......... ._._ ...................... _ ......... ... ... ..: _. _...... . 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses d: Buyback) -$ Option IIIA1 -$ - - - - C®ncep5 5-2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IIIAI: Hybrid Plan (1.5%/2%) with 16'/'0 DC for New Employees 80% ---- --- -. ----- - - . . . ............... . . ....... 75% 70% 65% 60% ... . .... 55% . . . .. . . . . ..... . . ......................... ..................... .. . ........ . ... . ........... . .......... .............. . ...... . ........ . .. .. . ............... ..... .. . ........ .... . .. . ................. .. . . ........... . ...... ....... ........... .. . .. ..... ....... ...... . ........... ............. . . .... 50% --- - - --- ----- --------- .............. ..... ..... ...... . ............. . ...... 45% 40% 35% a, 30% 20% 10 11 12 13 14 15 16, 17 18 19 20 21 22 23 24 25 26 27 28 29 36 31 32 33 34 35 36 37 38 39 40 —m—Current Plan Cost (incl. expenses &-Buyback)-% Option IllAl-% Conc ots 5 -3 Option IIIA1: Hybrid Plan (1.5 % / %) with 16% DC for New Employees .Current Plan Cost . Current Plan Cost Present Value_ (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option II1A1 -$ Option IIIA1 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 35,439,063 74.14% - - 2011 37,226,360 75.25% 37,233,110 75.26% (6,750) (6,238) 2012 37,981,309 74.18% 38,000,802 74.21% (19,493) (16,651) 2013 38,660,638 72.95% 38,699,016 73.02% (38,378) (30,297) 2014 40,013,760 72.95% 40,072,358 73.06% (58,598) (42,754) 2015 41,414,242 72.95% 41,492,477 73.09% (78,235) (52,755) 2016 42,863,740 72.95% 42,961,247 73.12% (97,507) (60,767) 2017 44,363,971 .72.95% 44,481,585 73.14% (117,614) (67,744) 2018 45,916,710 72.95% 46,057,896 73.17% (141,186) (75,158) 2019 47,523,795 72.95% 47,696,135 73.21% (172,340) (84,789) 2020 49,187,128 72.95% 49,393,705 73.26% (206,577) (93,931) 2021 50,908,677 72.95% 51,150,462 73.30% (241,784) (101,608) 2022 52,690,481 ' 72.95% 52,966,482 73.33% (276,002) (107,197) 2023 54,534,648 72.95% 54,843,010 73.36% (308,362) (110,689) 2024 56,443,360 72.95% 56,788,169 73.40% (344,809) (114,392) 2025 58,418,878 72.95% 58,804,458 73.43% (385,580) (118,224) 2026 60,463,539 72.95% 60,888,550 73.46% (425,012) (120,438) 2027 62,579,763 72.95% 63,046,204 73.49% (466,441) (122,161) 2028 64,770,054 72.95% 65,282,518 73.53% (512,464) (124,043) 2029 67,037,006 72.95% 67,601,081 73.56% (564,075) (126,188) 2030 69,383,301 72.95% 69,998,241 73.60% (614,940) (127,142) 2031 69,868,207 70.98% 70,534,264 71.65% (666,056) (127,274) 2032 70,122,087 68.82% 70,841,553 69.53% (719,466) (127,060) 2033 66,721,958 63.27% 67,487,385 64.00% (765,427) (124,933) 2034 62,987,707 57.71% 63,796,544 58.45% (808,837) (122,013) 2035 65,472,079 57.96% 66,314,920 58.71% (842,841) (117,507) 2036 65,058,318 55.65% 65,933,051 56.39% (874,733) (112,711) 2037 63,213,581 52.24% 64,119,934 52.99% (906,353) (107,935) 2038 58,980,901 47.09% 59,918,977 47.84% (938,076) (103,246) 2039 45,863,374 35.38% 46,834,283 36.13% (970,908) (98,761) 2040 42,349, 57 31.57% 43,354,448 32.31 (1,004,890) (94,471) Total APV (2,839,080) 6 -1 Section 6 Option IIIA2: Hybrid Plan (1.5 %/2 %) with 16% DC for New Employees and Non - vested Existing Employees Miami Beach Police & Fire Plan Projected Cost in Dollars Dption IIIA2: Hybrid Plan (1.5 %/2 %) with 16 %DC for New Employees 75,000,000 -- ..__.......__.._.._..... and Non- vested Existing Employees _.._ ........ .............._..... ....._..__........_....._._.... __....._.:.. 70,000,000 ___----....___.__..._.__..__....._........_... ...... _ ....... ........... __.._._..._.._.:....__:......._...... _ ............ ...... ...... _....._._...___..____.._._...._ ._.__.::__..__._..._._.__...___ ___.____........... _ ..... ..._._.___..___.._._..___ _...._.._..._..._................ 65,000,000 nor 60,000,000 55,000,000 _ ...... .... ......... ..... .... .......__ .... ........_.............._.........._......... ......... .... ... ..... ............ ._.. ...... ...... .... ....... ... ..... ........ .......... .... ..... ......... ... ......................_......._ 50,000,000 - 45,000,000 40,000,000 35,000,000 30, 000,000 ... _._.---__ ............. .... .... -__ ...... ......... ..... .._._ ....... _.._ .................. _ ...... _ ..... _ .... _ ...... ... ............. ......_........ __ ......... -- ...... .__.__._ ...... _ ..... __ .............. _.___._:__............. -- _.__.... _ .............. ......................... _ ...... ..... - ._....... ......... .... __ ...... . 25,000,000 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ Option IIIA2 -$ - - - - C®nceplb 6-2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option UIA2: Hybrid Plan (1.5 %/2 %) with 16%DC for New Employees 80% andNon-vested Existing Employees . .. .......... 75% ... .... . . ............... 70% 65% 60% 55% 50% .. . . .... ........ ..... ..... .. .. ... ... 45% 40% .... ... ...... . ......... ............. ..... . . ........ .. ... . . . . . ...... . ....... ...... . . ... . ... .... ...... ........ . ..... . . .. . .... ......... .... . . .. ... . ... .............. ...... . . ......... . 35% 30% 25% 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -% -OptionIIIA2-% c®nc ots 6 -3 Option IIIA2: Hybrid Plan (1.5 %/2 %) with 16% DC for New Employees and Non - vested Existing Employees Current Plan Cost Current Plan Cost 'Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -°o Option IIIA2 -$ Option IIIA2 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 35,718,266 74.72% (279,202) (279,202) 2011 37,226,360 75.25% 37,736,065 76.28% (509,704) (471;076) 2012 37,981,309 74.18% 38,535,477 75.26% (554,168) (473,355) 2013 38,660 72.95% 39,259,056 74.08% (598,418) (472,414) 2014 40,013,760 72.95% 40,658,303 74.12% (644,543) (470,265) 2015 41,414,242 72.95% 42,104,230 74.16% (689,988) (465,270) 2016 42,863,740 72.95% 43,598,586 74.20% (734,846) (457,966) 2017 44,363,971 72.95% 45,141,526 74.23% (777,555) (447,858) 2018 45,916,710 72.95% 46,741,166 74.26% (824,455) (438,883) 2019 47,523,795 72.95% 48,395,625 74.29% (871,830) (428,930) 2020 49,187,128 72.95% 50,105,957 74.31% (918,829) (417,794) 2021 50,908,677 72.95% 51,871,229 74.33% (962,552) (404,505) 2022 52,690,481 72.95% 53,689,172 74.33% (998,691) (387,886) 2023 54,534,648 72.95% 55,563,680 74.33% .(1,029,032) (369,381) 2024 56,443,360. 72.95% 57,462,748 74.27% (1,019,387) (338,187) 2025 58,418,878 72.95% 59,416,732 74.20% (997,854) (305,955) 2026 60,463,539 72.95% 61,435,330 74.12% (971,791) (275,383) . 2027 62,579,763 72.95% 63,483,192 74.00% (903,429) (236,609) .2028 64,770,054 72.95% 65,542,546 73.82% (772,492) i (186,983) 2029 67,037,006 72.95% 67;648,469 73.61% (611,463) (136,789) 2030 69,383,301 72.95% 69,842,351 73.43% (459,050) (94,911) 2031 69,868,207 70.98% 70,178,052 71.29% (309,844) (59,207) 2032 70,122,087 68.82% 70,274,686 68.97% (152,599) (26,950) 2033 66,721,958 63.27% 66,763,850 63.31% ' (41,891) (6,837) 2034 62,987,707 57.71% 62,938,247 57.67% 49,460 } 7,461 2035 65,472,079 57.96% 65,389,080 57.89 %° 82,999 11,572 2036 65,058,318 55.65% 64,959,051 55.56% 99,267 12,791 2037, 63,213,581 52.24% 63,105,231 52.15% 108,350 12,903 2038 58;980,901 47.09% 58,868,759 47.00% 112,142 12,343 2039 45,863,374 35.38. 45,747,307 35.29% 116,067 11,806 2040 42,349,557 31.57% 43,354,448 32.31% (1,004,890) (94,471) Total APV (7,678,193) - - - - C®nce�t5 7 -1 Section 7 Option IIIB1: Hybrid Plan (2 %/2.66 %) with 10% DC for New Employees Miami Beach Police & Fire Plan Projected Cost in Dollars Option 11IB1: Hybrid Plan (2 %/2.66 %) with 10% DC for New Employees 75, 000, 000 _...:........ _._......._.....__......._..._......_.__..._.__.._ ........................_........__...._._............. _ ... _._........_....--- .................. ........_......_..... ._._.... ............... ...... - .................. _.............. _ ......... _....-- ..... _..__._.__.... - .._.......... -- ._..._._..... --- ._....... 70,000,000 65,000,000 60,000,000- — 55,000,000 -- 50,000,000 — -- 45,000,000 ... .._... ... .. .............. ... .................. ........... ....... ... ..... .........................._ .... .: s..... ..... ...... ._._... ..... ...... ............. .......... ..... .............. ..._.....................................:................ ... ...... ...... ..... ..... ..... ............. ......... ............_....._......_................_.....__. .... ....... ...... ...... ....... ...._._...._..._..........: 40,000,000 35,000,000 30,000,000 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ Option IIIB1 -$ Miami Beach Police & Fire Plan Projected Cost in -Percentages OptionUlBl: Hybrid Plan (2%/2:66%) with 10% DC for New Employees 80% . . ... . .. .... . ......... ... . ....... . . ........ . ......... ........ ........ ... .. ............ .... . . ....... . ... ......... 75% 70% 65% 60'Xi I rVI 55% ... . .......... .......... .. .. . ... . . ................ ... ......... . ........... . ..... .......... ..... ............ . ........... . .... . ..................... . ........ ................................ ....... ------ . ......... . . . . ..... . . ............ ......... - -- ........ . .. ............ ..... . .... 50% . . . . ........ . .. ..... . ..... . ............. . .... ... . ........ ........... . ....... ............ .. ...................... ..... .. ............ . ...... ... ---- ---- - ------------- . . ....... . . ..... . .......... . . . . . ...... _ 45 % 40% 35% 30% 25% - - - ----- --------------- . ........... . . ...... . ... ...... — ------- ---- . . ...... . . .... ....... . ...... ... ..... ............ . .. . ........ . ..... . ..... 20% 10 11.12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28.29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses &Buyback)-% • OptionIIIBI-% Conc ts 7 -3 Option IHB1: Hybrid Plan (2 %/2.66 %) with 10% DC for New Employees Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings 'Year Buyback) -$ Buyback) -% OptionIIIB14 OptionIHB1 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 35,439,063 74.14% - - 2011 37,226,360 75.25% 37,232,100 75.26% (5,740) (5,305) 2012 37,981,309 74.18% 37,997,887 74.21% (16,578) (14,161) 2013 38,660,638 72.95% 38,693,277 73.01% (32,639) (25,767) 2014 40,013,760 72.95%' 40,063,596 73.04% (49,836) (36,361) 2015 41,414,242 72.95% 41,480,778 73.07% (66,536) (44,866) 2016 42,863,740 72.95% 42,946,667 73.09% (82,926) (51,681) 2017 44,363,971 72.95% 44,463,998 73.11% (100,027) (57,614), 2018 45,916,710 72.95% 46,036,784 73.14% (120,074) (63,919) 2019 47,523,795 72.95% 47,670,364 73.17% (146,570) (72,110) 2020 49,187,128 72.95% 49,362,815 73.21% (175,687) (79,885) 2021 50,908,677 72.95% 51,114,307 73.24% (205,630) (86,414) 2022 52,690,481 72.95% 52,925,211_ 73.27% (234,730) (91,168) 2023 54,534,648 72.95% 54,796,899 73.30% (262,252) (94,138) 2024 56,443,360 72.95% 56,736,609 73.33% (293,249) (97,287) 2025 58,418,878 72.95% 58,746,801 73.36% (327,923) (100,546) 2026 60,463,539 72.95% 60,824,997 73.39% (361,459) (102,429) 2027 62,579,763 72.95% 62,976,455 73.41% (396,693) (103,894) 2028 64,770,054 72.95% 65,205,888 73.44% (435,833) (105,495) 2029 67,037,006 72.95% 67,516,733 73.47% (479,727) (107,319) 2030 69,383,301 72.95% 69,906,288 73.50% (522,986) (108,130) 2031 69,868,207 70.98% 70,434,666 71.55% (566,459) (108,242) 2032 70,122,087 68.82% 70,733,969 69.42% (611,882) (108,061) 2033 66,721,958 63.27% 67,372,929 63.89% (650,970) (106,251) 2034 62,987,707 57.71% 63,675,596 58.34% (687,889) (103,768) 2035 65,472,079 57.96% 66,188,888 58.59% (716,809) (99,936) 2036 65,058,318 55.65% 65,802,250 56.28% (743',932) (95,857) 2037 63,213,581 52.24% 63,984,405 52.88% (770,824) (91,795) 2038 58,980,901 47.09% 59,778,704 47.73% (797,803) (87,808) 2039 45,863,374 35.38% 46,689,100 36.02% (825,726) (83,993) 2040 42,349,557 31.57% 43,204,184 32.20% (854,626) (80,345) Total APV (2,414,545) Cons ots 8 -1 Section 8 Option IIIB2: Hybrid Plan (2 %/2.66 %) with 10% DC for New Employees and Non - vested Existing Employees . Miami Beach Police & Fire Plan Projected Cost in Dollars Option IIIB2: Hybrid Plan (2% /2.66 %) with 10% DC 75 for New Employees and Non-vested Existing Employees _...._._ ...............__........._. .._........... _....._.......... _ ...:........:.. ..:..:.._.._.................._ 70,000,000 65,000,000 60,000,000 _ _ ............ .....: _..._....._- ...... 55,000,000 50 000,000 45,000,000 ..... ... ......,_ ......... .......... ._ ....... .... - ....... ..... .... . ................ _ ... . ...... ..........._....:........__.................._................. _ ....... ........__.........__.......................... ....................... :...... ............. ............ _ .... .........._............................... ....._....... .. .... ...... ............ .... ......... ...... 40,000,000 35,000,000 - 30,000,000 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses 8- Buyback) -$ Option IIIB2 -$ - - - - C.®nc pts 8 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IIIB2: Hybrid Plan (2%/2.66%) with 10% DC 80% --_..__...._...__._. _....- __...__...._____.....__._ for New Employees and Non-vested Existing Employees - ---- --- ------- ..— .__...___...._._.._.__.- .___.. ._.__... 75% 70% 65% 60% 55 /° ............... _.. _..........._ ............._................. .......__...._.............._.. -- .._._._.................._....._............ .............._.__........_.... _ ._.._.._.._.._..........__ ..... .... _....__..._..._._.- _..._... ° ._ .._._._ 50% .._...__.._...._._....._._...__.._._..._.....-.._.._......__....._........_._..._...._....._......_...._._..___._.___.-_._._..._..._...__...__.._......_...._._._..._.__...--- ................................._.__.._.__-.._------- ____.._....._---..._.......__.._...._.......... ........... _ ....... .__...._...._. _.___....__...._...__.._... 45% --- 40% 35% 30% 25% _.._....__._._._..-...-_.----. ---- -..--....-.___...-.._._...__._....__.._._..._._._.____....__._.._..-_.....__._.....__......_....__ ........................_...._..___.__._...--.---.--..___.__.__......_.._______-__.._.__._._-_.-.....:_---_._..._._,_........__... ..__--- .____...-- .- .-- ..- -..... 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 - -- Current Plan Cost (incl. expenses &Buyback) -% Option11IB2 -% Conte' �S 8 -3 Option IIIB2: Hybrid Plan (2%/2.66%) with 10% DC for New Employees and Non - vested Existing Employees Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IIIB2 -$ Option IIIB2 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 35,672,176 74.63 %. (233,113) (233,1'13) 2011 37,226,360 75.25% 37,484,576 75.77% (258,216) (238,647) 2012 37,981,309 74.18% 38,269,463 74.74% (288,154) (246,133) 2013 38,660,638 72.95% 38,979,195 73.55% (318,557) (251,481) 2014 40,013,760 72.95% 40,364,104 73.59% (350,344) (255,614) 2015 41 72.95% 41,795,658 73.62% (381,416) (257,195). 2016 42,863,740 72.95% 43,275,602 73.65% (411,862) (256,678) 2017 44,363,971 72.95% 44,804,661 73.67% (440,690) (253,830) 2018 45,916,710 72.95% 46,389,538 73.70% (472,828) (251,701) 2019 47,523,795 72.95% 48,029,870 73.73% (506,075) (248,983) 2020 49,187,128 72.95% 49,726,382 73.75% (539,254) (245,200) 2021 50,908 ' 72.95% 51,478,665 73.77% (569,987) (239,533) 2022 52,690,481 72.95% 53,285,377 73.77% .(594,896) (231,054) 2023 54,534,648 72.95% 55,149,811 73.77% (615,164) (220,819) 2024 56,443,360 72.95% 57,050,021 73.73% (606,660) (201,263) 2025 58,418,878 72.95% 59,008,714 73.69% (589,836) (180,852) 2026 60,463,539 72.95% 61,032,876 73.64% (569,338) (161,337) 2027 62,579,763 72.95% 63,097,868 73.55% (518,105) (135,692) 2028 64,770,054 72.95% 65,191,763 73.42% (421,709) (102,076) . 2029 67,037,006 72.95% 67,340,889 73.28% (303,883) (67,981) 2030 69,383,301 72.95% 69,575,282 73.15% (191,981) (39,693) 2031 69,868,207 70.98% 69,950,391 71.06% (82,183) (15,704) 2032 70,122,087 68.82% 70,088,644 68.79% 33,443 5,906 2033 66,721,958 63.27% 66,605,531 63.16% 116,427 19,003 2034 62,987,707 57.71% 62,801,769 57.54% 185,939 28,049 2035 65,472,079 57.96% 65,257,208 57.77% 214,871 29,957 2036 65,058,318 55.65°0 64,826,506 55.45% 231,812 29,869 2037' 63',213,581 52.24% 62,969,701 52.04% 243,880 29,043 2038 58,980,901 47.09% 58,728,486 46.89% 252,415 27,781 2039 45,863,374 35.38% 45,602,125 35.18% 261,250 26,575 2040 42,349,557 31.57% 43,204,184 32.20% (854,626) (80,345) Total APV (4,218,739) - - - - C®nceps 9 -1 Section 9 Option IIIC1 - Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 17.46% DC for New Employees Miami Beach Police & Fire Plan Projected Cost in Dollars Option HICl: Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 17.46% DC 75,000;000 for New Employees' 70,000,000 65,000,000 60,000,000 _..... _ .. _: _:.. . _ ...... ..... ... _ ......... . _ ... _ ....... ....... . ---------- _ __ . ......... _ ................. ....._ ..................... 55,000,000 50,000,000 ....... ..... . ..... ..... ....... ....._ — _.:.__....._ :.:.._..._ .............._....._ . .__._ ............ ..__..._ ..... _ ........... ......... _ ........ .................................... .. .................. .._._ ..... ............__._ ............ ._. .......... __..--- ..... ._.__. ... . ...... ........ - 45,000,000 _......._._.._. ... ........ _..... ..... . y........ ._.................... ....... ... ...... . ..... :_._.................... ............. _ ....... _..... _._.__ ... _.. ..........._...... _ .... ...... ..... __._ ................ .......... ._ ............... _... ._....__.......... _ ..... _ ....... .......... _ ... _ .......... ................... _ ... .... ............. ... ..._... 40,000,000 35,000,000 ...... _. ............ _ ......... ...... _ ... ............ __ ............ .................... _ .... ..................... _ ............... _.._.....__ ... ............. .. - ....... _ ..... _...._.._...... _.._ ............... _ ..... ......._..._ .............. _ ......... _.._ ... - ....... ..._..._.. ..._.:_._......__ ............... .......... .. ........... .. ................... __........_..... 30,000,000 25,000,000 20,000,000 15,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ Option IIIC1-$ - - - - Concepts 9 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IIIC1: Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 17.46% DC 80% -- -___._ for New Employees 75% 70 /o .. ..__. . ._._... 65%. - 60% l,x>. 55% .... ..... .... ......_ .. .. -. . ...___ ..... _. ...... . -_ - _ _... .. ..... _ _ . _ ............ . _ ...... _ ............ _.. - _...._._... 40% _ — — 35 30% _....:......:_ ......... .............. .._._...__._.._.._......._.-__ ........ .._.....__. ..... __...._._.._..._...._....._.......__.._. ........... .... _.._...._...__ ............ _ .... :.......__.... __._._...._........._ ... _. ... _--......—_ ................. ..... _._. ...... _.._...._ ._............_- .._......__.... — ............ . 25% 15% _____.__.._.....___...__.. m..._._....;...__..........._.._.._...:._._...._._._._.___..._ ------ ....--- .... ------ .._. ....... ....._.__.._._._.__....._._...._.........._...._.._....._.:...._._.__......._:....__.__.....--..__..._._....----__..._.._.....__ __.---- ..__ ........ _..........._ 10 %.. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 -38 39 40 rF °Current Pl�C.,t �(incl. pen ses &Buyback)% OptionIIIC1 -% - - - - Conce 9 -3 Option IIIC1: Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 17.46% DC for New Employees Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IIIC1 -$ Option IIIC1 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 35,439,063 74.14% - - 2011 37,226,360 75.25% 37,184,359 75.16% 42,001 38,818 2012 37,981,309 74.18% 37,860,005 73.94% 121,304 103,61.5 2013 38,660,638 72.95% 38,421,816 72.50% 238,822 188,535 2014 40,013,760 72.95% 39,649,111 72.28% 364,649 266,052 2015 41,414,242 72.95% 40,927,397 72.09% 486,844 328,287 2016 42,863,740 72.95% 42,256,970 71.92% 606,770 378,147 2017 44,363,971 72.95% 43,632,075 71.75% 731,896 421,559 2018 45,916,710 72.95% 45,038,130 71.55% 878,580 467,695 2019 47,523,795 72.95% 46,451,349 71.30% 1,072,446 527,631 2020 49,187,128 72.95% 47,901,631 71.04% 1,285,497 584,519 2021 50,908,677 72.95% 49,404,090 70.79% 1,504,587 632,292 2022 52,690,481 72.95% 50,972,965 70.57% 1,717,516 667,073 2023 54,534,648. 72.95% 52,615,759 70.38% 1,918,889 688,804 2024 56,443,360 72.95% 54,297,667 70.18% 2,145,693 711,846 2025 58,418,878 72.95 56,019,472 69.95% 2,399,406 735,690 2026 60,463,539 72.95% 57,818,755 69.76% 2,644,783 749,469 2027 62,579,763 72.95% 59,677,171 69.57% 2,902,592 760,191 2028 64,770,054 72.95 %_ 61,581,071 69.36% 3,188,983 771,901 2029 67,037,006 72.95% 63,526,856 69.13% 3,510,151 785,250 2030 69,383,301 72.95% 65,556,623 68.93% 3,826,678 791,183 2031 69,868,207 70.98% 65,723,440 66.76% 4,144,767 792,005 2032 70,122,087 68.82% 65,644,959 64.43% 4,477,128 790,678 2033 66,721,958 63.27% 61,958,823 58.76% 4,763,135 777,438 2034 62,987,707 57.71% 57,954,440 53.10% 5,033,268 759,269 2035 65,472,079 57.96% 60,227,205 53.32% 5,244,874 731,229 2036 65,058,318 55.65% 59,614,984 50.99% 5,443,334, 701,385 2037 63,213,581 52.24% 57,573,481 47.58% 5,640,100 671,662 2038 58,980,901 47.09% 53,143,398 42.43% 5,837,503 642,486 2039 45,863,374 35.38% 39,821,558 30.72% 6,041,816 614,578 2040 42,349,557 31.57 0/0 34,139,547 25.45% 8,210,011 771,838 Total APV 17,851,123 - - - - C®nci is 10 -1 Section 10 Qption IIIC2 - Hybrid Plan (Chapter Minimum with 5 % Employee Contribution) with 17.46% DC for New Employees and Non - vested Existing Employees Miami Beach Police & Fire Plan Projected Cost in Dollars Option IIIC2: Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 17.46% DC 75,000,000 for New Employees and Non - vested Existing Employees - 70,000,000 65,000,000 — — — -- — 60,000,000 — ---- 55,000,000 -- . — -- -- - -- 50,000,000 _ .................................._............ ...........................:... .. ;:................_.... 45 ,000,000 40,000,000 35,000,000 ----.._......._. --- .__..-..._ ................_........_._.........__.._...-........_..............._......: :.......- ....._....._......... _........ _.....__.._....._........_..... ...._._ ................ _._. ............ ... ... ........... .......... .... ._ ......... . ... ..... .......... _.........�: 30,000,000 — — --�- -- - -- 25,000,000 .. ........ ...... ......... _.._.-_...-.. ..... _ ..... _ ....... __ ......... .... ..__.-_:_..._ ........... _ ............... _..__.._............ _ ...... _._. ............. _ ............... _ ....... _ ... _............ _ ............ _. ..... .... _ ............ _- ..... .._._......... _ ....... _..........._........... ._.............. _.-._ ........ __ ....... _ ...... ... ....... _.._ .............. _.._....... 20,000,000 15,000,000 10 11 12'13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ Option IIIC2 -$ A. ConceoLb 10 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IEC2: Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 17.46% DC 80% -- for New Employees and Non-vested Existing Employees ---- - - - - -- 75% 65% 60% 55% ..._._... _. .... ......... _.._..___ .... _ ........ _.._.._ .............. - ....... __ .... _ ............. _ ....... __ .............. ..... _ ...... ........ _ .......... _...._.._...._ ....... .._ .... .... ..... _ ..... ._....._._ .._ ......... ................ ..._ _... � �_ �: ..._,._.._ ._........ __ ..... - ....... 50 °a - -._.._ __ _ __.__ __ _.___ __ ___.___.._ ._.__. _...___.____ �.__. ,. 35% 30% ....... ....... _. ............._._._..__.._....._._.__.._..._...._......._.._....... ................_ ........... _... ..... .._..._...._._.__........__........_....._........_-..._ ..... .......................... ........ ............... _._ .... __. ........................... __ ........ .._ ...... _ .... .... _ ........ ---- ... _ .............. ---- ............. ............ 25% 20% — — — — — 15% _._......._...__...._.__ ... ..... ...... ...._..___._..._._.__.._.._........_._.__.......__.._.........._..__...-_......._....._.._......_.._..._.__..._....__._____.__.___.._._.__.._ T..__._...._....._._...._...__.._.__._._.........-_....__....._..._..._ ...... __...._._. m__....._. ____.__..__.:__.__.._._-- -. —... 10% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses &Buyback) -% OptionIIIC2 -% 10 -3 Option IIIC2: Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 17.46% DC for New Employees and Non - Vested Existing Employees Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IIIC2 -$ Option IIIC2 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 33,844,490 70.80% 1,594,574 1,594,574 2011 37,226,360 75.25% 35,524,864 71.81% 1,701,496 1,572,547 2012 37,981,309 74.18% 36,134,081 70.57% 1,847,228 1,577,851 2013 38,660,638 72.95% 36,631,553 69.12 °0 2,029,085 1,601,838 2014 40,013,760 72.95% 37,792,461 68.90% 2,221,299 1,620,682 2015 41,414,242 72.95% 39,002,630 68.70% 2,411,611 1,626,189 2016 42,863,740 72.95% 40,262,368 68.52% 2,601,372 1,621,209 2017 44,363,971 72.95% 41,567,488 68.35% 2,796,483 1,610,725 2018 45,916,710 72.95% 42,901,146 68.16% 3,015,564 1,605,279 2019 47,523,795 72.95% 44,244,120 67.92% 3,279,675 1,613,561 2020 49,187,128 72.95% 45,624,078 67.67% 3,563,050 1,620,128 2021 50,908,677 72.95% 47,056,527 67.43% 3,852,150 1 2022 52,690,481 72.95% 48,557,017 67.23% 4,133,464 1,605,414 2023 54,534,648 72.95% 50,131,402 67.06% 4,403,246 1,580,587 2024 56,443,360 72.95% 51,768,524 66.91% 4,674,836 1,550,903 2025 58,418,878 72.95 %. 53,452,607 66.75% 4,966,271 1 2026 60,463,539 72.95% 55,213,445 66.62% 5,250,094 1,487,753 2027 62,579,763 72.95% 57,056,905 66.51% 5,522,857 1,446,440 2028 64,770,054 72.95% 58,982,770 - 66.43% 5,787,285 1,400,826 2029 67,037,006 72.95% 60,968,721 66.35% 6,068,286 _ 1,357,526 2030 69,383,301 72.95% 63,030,125 66.27% 6,353,176 1,313,547 2031 69,868,207 70.98% 63,223,732 6423% 6,644,476 1,269,662 2032 70,122,087 68.82% 63,174,942 62.01% 6,947,146 1,226,893 2033 66,721,958 63.27% 59,483,257 56.41% 7,238,702 1,181,500 2034 62,987,707 57.71% 55,456,935 50.81% 7,530,772 1,136,018 2035 65,472,079 57.96% 57,664,462 51.05% .7,807,617 1,088,521 2036 65,058,318 55.65% 56,971,860 48.73% 8,086,458 1,041,956 2037 63,213,581 52.24% 54,841,758 45.32% 8,371,823 996,974 2038 58,980,901 47.09% 50,316,065 40.17% 8,664,837 953,668 2039 45,863,374 35.38% 36,895,268 28.46% 8,968,106 912,242 2040 42,349,557 31.57% 34,139,547 25.45% 8,210,011 771,838 Total APV 43,128,414 Conc P* y 11 -1 Section 11 Option IIID1 - Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 12.46% DC for New Employees Miami Beach Police &- Fire Plan Projected Cost in Dollars Option IIID1: Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 12.46% DC 75,000,000 for New Employees 70,000;000 65,000,000 60,000,000 - __._.... _..._._.__.. __:_.._._._....._......_._.... _ .......:.:........................... ._...._.._._.._._.._......... -- ---- ._...._.._......._. _.._._...._.._.._ - 55,000,000 50,000,000 ..... _ ....... _ ....... ._._._ .......... ............. .... _...._ ........ ............ ...... _ ........... _. ... - ......... _ ....... . _....._..__...:.......... .............. ... ..... .............. ..... -.._.-.._ ......... ........... _ ........... . ........ _ ....... ..._. .............._..__............ ........... . ... _ ........ .. 45 40,000,000 35,000,000 _._.._.._....._ ..._._._....__....__._.._._._.: -- .....:.............._. . 30,000,000 25,000,000 20,000,000 15,000,000 10 11:12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ Option IIID1 -$ - - -- Concepts 11 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option HID1; Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 12.46 %DC 8000 for New Employees 75% 65% _ 60% 55% -._ .. -- -..... _.... ..... _ .... _ ....... _..... ......... .... ..... __.- .. . . . . .... ... .. .. .. - . _.... _ _ ... _ _........ _ _ ..._._...._._-- - - - - -- _ ,._ - -_ ..__ ... - - ..... _ _ _ . — -- ...... - -- .............. _ _...._.. - ------ - 45% 40% 35 % 30% .....::........_.. _ .... ....... :... ................................. __..__ ........... .......... ...... _ .................... __ ........... .............__._ .......... _ ....... _._ ...... _ ............. ......... ....:.._._...._. ........... ........ _. ............... ---_...._ ..................... - _:_.......... ... - -- _ ......_. - 25 20% _. 15% ___._....._.....,_...__......__. ..... ......... _ ..... ___.__..._____..__..____.__.._.._......... .__.___..........___._.____..._____ _ ..... __ .... _ ..... .__.._...._:.__ _._.... _ ....... ....... _ ... ._...----._............. _ ..... _ .... .__-- ................ ..... ....._........_. ._.._._.____..�___._.._......_. 10% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 -- ,, Current Plan Cost (incl. expenses & Buyback) -% Option IMI -% - - - - C©nc O LS i 11 -3 Option IIIDl: Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 12.46% DC for New Employees Current Plan Cost Current Plan Cost Present Value (incl. expenses 8: (incl. expenses S Annual of Savings Year Buyback) -$ Buyback) -% Option RlD1 -$ Option IIID1 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 35,439,063 74.14% - - 2011 37,226,360 75.25% 37,139,302 75.07% 87,059 80,461 2012 37,981,309 74.18% 37,729,876 73.68% 251,433 214,767 2013 38,660,638 72.95% 38,165,620 72.02% 495,017 390,786 2014 40,013,760 72.95% 39,257,934 71.57% 755,826 551,459 2015 41,414,242 72.95% 40,405,135 71.17% 1,009,107 680,457 2016 42,863,740 72.95% 41,606,057 70.81% 1,257,683 783,804 2017 44,363,971 72.95% 42,846,933 70.45% 1,517,038 873,787 2018 45,916,710 72.95% 44,095,633 70.06% 1,821,077 969,416 2019 47,523,795 72.95% 45,300,882 69.54% 2,222,913 1,093,647 2020 49,187,128 72.95% 46,522,613 69.00% 2,664,514 1,211,561 2021 50,908,677 72.95% 47,790,043 68.48% 3,118,635 1,310,583 2022 52,690,481 72.95% 49,130,498 68.02% 3,559,982 1,382,677 2023 54,534,648 72.95% 50,557,269 67.63% 3,977,379 1,427,718 2024 56,443,360 72.95 %' 51,995,873 67.20% 4,447,488 1,475,479 2025 58,418,878 72.95% 53,445,507 66.74% 4,973,371 1,524,902 2026 60,463,539 72.95% 54,981,561 66.34% 5,481,977 1,553,464 2027 62,579,763 72.95% 56,563,413 65.94% 6,016,350 1,575,686 2028 .64,770,054 72.95% 58,160,086 65.50% 6,609,968 1,599,958 2029 67,037,006 72.95% 59,761,338 65.03% 7,275,668 1,627,627 2030 69,383,301 72.95% 61,451,550 64.61% 7,931,751 1,639,925 2031 69,868,207 70.98% 61,277,138 62.25% 8,591,070 1,641,628 2032 70,122,087 68.82% 60,842,115 59.72% 9,279,972 1,638,879 2033 66,721,958 63.27% 56,849,165 53.91% 9,872,793 1,611,436 2034 62,987,707 57.71% 52,554,997 48.15% 10,432,710 1,573,776 2035 65,472,079 57.96% 54,600,762 48.34% 10,871,317 1,515,656 2036 65,058,318 55.65% 53,775,642 45.99% 11,282,676 1,453,796 2037 63,213,581 52.24% 51,523,058 42.58% 11,690,523 1,392,188 2038 58,980,901 47.09% 46,881,210 37.43% 12,099,691 1,331,714 2039 45,863,374 35.38% 33,340,194 25.72% 12,523,180 1,273,867 2040 42,349,557 3157% 27,431,335 20.45% 14,918,222 1,402,488 Total APV 36,803,593 12 -1 Section 12 Option IIID2 - Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 12.46 DC for New Employees and Non - vested Existing Employees Miami Beach Police & Fire Plan Projected Cost in Dollars Option IIID2: Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 12.46% DC 75,000,000 for New Employees and Non - vested Existing Employees 70,000,000 65,000,000 3 60,000,000 - 55,000,000 .._ ........._ ....:. .' ....�......_ ............_ ................ . 50,000,000 -- � 45,000,000 40,000,000 ... .._........__._..__.........__. _.._...----._........._.._..___._.__.__......._ .................._......._.._............_.......... ..._.._........_._..____......_ 35,000,000 30,000,000 - - -- - 25,000,000 _..._......_.. _ ....... ._............... ,__ ...... ..... _ ... _ .... _ ........... --- ......... ........... ___.._ ....... ....................... ......... -- ............ __ ....... _ ....... ....... -- ........... ........... .___.........__............. .... _ ........... __ ..... .......... __ .... __........... 20,000,000 15,000,000 10` 1112 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2829 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ Option IIID2 -$ - - - - Concepts 12 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IIID2: Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 12.46% DC 80% -- for New Employees and Non- vested Existing Employees - - - - -- 75% 70% _.. _.__ 9 .. . . ... _._ .. _ _ _ _ _ .............. � .... - . . .. __ _ ... . -------- __......... 60 % 55% ....- .... ...................... ._ . ..... ..... _ ........ --- ....._ -- - - - -- ._.......__.._._.. - 40% 35% _ 30% ..__..........__.._.____.._....._...._.._._..___...__._..._._.....__._.._._....._...__.......__..........._._............_..__-......._......._...._....__.__:__._.._..__......_._. ...... ...___.. .......... ...... .........__....._._--._...__.-.......__-....___...__......______ ....._.......__.- _-- _- ._._.._._ 25% 20% — C 15% - -- _....__...._._ ... ._..._ ....... ... ........... _...._._.__.._..__ ------------ _._..:-- --------- -._ ...... _.......... -- ---------- _._. ................__...___......_......... ........... _..___...___....___.... ............... ............ .._.._...__.__...._. .... __..---_ .... _.___.____._.._.._._.._.... 10% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 vr° Current Plan Cost (incl. expenses & Buyback)% : Option IIID2 -% 12 -3 Option IIID2: Hybrid Plan (Chapter Minimum with 5% Employee Contribution) with 12.46% DC for New Employees and Non - Vested .Existing Employees Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IIID2 -$ Option IIID2 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 32,960,590 68.96% 2,478,473 2,478 2011 37,226,360 75.25% 34,549,349 69.84% 2,677,012. 2,474,133 2012 37,981,309 74.18% 35,026,618 68.41% 2,954,691 2,523,816 2013 38,660,638 72.95% 35,357,071 '66.72% 3,303,566 2,607,962 2014 40,013,760 72.95% 36,340,969 66.25% 3,672,791 2,679,706 2015 41,414,242 72.95% 37,377,567 65.84% 4,036,674 2,721,995 2016 42,863,740 72.95% 38,465,825 65.46% 4,397,915 2,740,838 2017 44,363,971 72.95% 39,596,320 65.11% 4,767,651 2,746,083. 2018 45,916,710 72.95% 40,730,878" 64.71% 5,185,832 2,760,580 2019 47,523,795 72.95% 41,830,709 64.21 5,693,085 2,800,931 2020 49,187,128 72.95% 42,949,796 63.70% 6,237,332 2,836,131 2021 50,908,677 72.95% 44,118,521 63.22% 6,790,156 2,853,513 2022 52 ;690,481 72.95% 45,367,879 62.81% 7,322,602 2,844,057 2023 54,534,648 72.95% 46,706,798 62.48% 7,827,850 2,809,882 2024 56,443,360 72.95% 48,125,099 62.20% 8,318,261 2,759,630 2025 58,418,878 72.95% 49;577,154 61.91% 8,841,724 2,710,991. 2026 60,463,539 72.95% 51,117,333 61.67% 9,346,206 2,648 2027 62579,763 72.95% 52,770,874 61.52% 9,808,889 2,568,954 2028: 64,770,054 72.95% 54,543,387 61.43% 10,226,667 2,475,389 2029 67,037,006 72.95% 56,373,960 61.35% 10,663,046 2,385,412 2030 69,383,301 72.95% 58,274,547 61.27% 11,108,754 2,296,784 2031 69,868,207 70.98% 58,301,709 59.23% 11,566,498 2,210,189 2032 70,122,087 68.82% 58,080,648 57.01% 12,041,439. 2,126,565 °0 54,210,663 51.41% 12,511 ;296 2,042,092 2033 66,721,958 63.27 2034 62,987,707 57.71% 49,999,800 45.81% 12,987,907 1,959,228 2035 65,472,079 57.96% 52,016,328 46.05% 13,455,751 1,875,972 2036 65,058,318 55.65% 51,126,041 43.73% 13,932,277 1,795,202 2037 63,213,581 52.24% 48,791,335 40.32% 14,422,246 1,717,500 2038 58,980,901 47.09% 44,053,877 35.17% 14,927,024 1,642,895 2039 45,863,374 35.38% 30,413,904 23.46% 15,449,470 1,571,531 2040 42,349,557 31.57% 27,431,335 20.45% 14,918,222 1,402,488 Total APV 74,067,418 - - - - Conce* 13-1 Section 13 Option IVAI: Change Existing Plan to 3% Multiplier for all FS, ZD Vested Employees Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVAI: Change Existing Plan to 3% Multiplier for all FS, Vested EE's Grandfathered 75,000,000 70,000,000 65,000,000 ...... ..... .. ... ..... . . . . ........ ................ . ....... 6.0,000,000 55,000,000 . .... .. 50,000,000 .. .. .. . ...... .......... . . .......... .. .... ... I ... . ......... . ................... . .. . . .......... . ....... . . .............. .... . ...... . . .. .......... .............. . . ............ . .... ............ ...... . ...... . .. . ....... . . . . ...... ............ . .. . ............. .. .................. . . . ............. 45,000,000 .... .. ........... ... . . . .. . ...... ................................ 40,000,000 35,000,000 30,00 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 0 32 33 34 35 36 37 38 39 40 Cur-rent Plan Cost (ind. expenses & Buyback)-$ --m— option IVAI-$ C'm Conc ts 13-2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option TVAI: Change Existing Plan to 3% Multiplier for all FS, Vested EE's Grandfathered 80% 75% 70% 65% 60% 55% - - - - ------- ----- - - -------------- .. .... . ........................... . .. ... . . ...... .... . . ... ........... . . ................. . ......... . ................ ..... ........... .. 50% .. . ....... ......... . ............ ......... . ........... .. .............. ...... . ........ . . .... . ...... . .. .......... ... ...... ..... ... ..... . ........ . ... ....... . .. . ........ ..... ..... . ............... ... ... . ......... 45% 40% 35% 30% 25% . ......... . . .... ............ ... . ....... . . ........ . .............. . . .. ...... . ..... ..... . ...... . ............. ..... . ....... ...... . ....... . ... . . ... . .... . . .. . ........ . .......... . ....... .20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 3 34 35 36 37 38 39 40 ­-Current Plan Cost (incl. expenses &Buyback)-% —OptionIYAI-% Conc p e _ts 13 -3 Option IVA1: Change Existing Plan to 3% Multiplier for all FS, Vested EE's Graridfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVAl -$ Option IVA1 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 34,786,003 72.77% 653,061 653,061 2011 37,226,360 75.25% 36,523,174 73.82% 703,186 649,895 2012 37,981,309 74.18% 37,207,793 72.67% 773,516 660,716 2013 38,660,638 72.95% 37,798,145 71.32% 862,493 680,885 2014 40,013,760 72.95% 39,057,080 71.21% 956,680 698,003 2015- 41,414,242 72.95% 40,364,647 71.10% 1,049,595 707,759 2016 42,863,740 72.95% 41,721,804 71.01% 1,141,936 711,669 2017 44,363,971 72.95% 43,127,226 70.92% 1,236,745 712,343 2018 45,916,710 72.95% 44,572,807 70.81% 1,343,903 715,401 2019 47,523,795 72.95% 46,049,469 70.69% 1,474,326 725,351 2020 49,187,128 72.95% 47,572,622 70.55% 1,614,506 734,120 2021 50,908,677 72.95% 49,151,396 70.43% 1,757,281 738,484 2022 52,690,481 72.95% 50,795,013 70.33% 1,895,468 736,189 2023 54,534,648 72.95% 52,507,508 70.24% 2,027,140 727,661 2024 56,443,360 72.95% 54,284,920 70.16% 2,158,440 716,075 2025 58,418,878 72.95% 56,119,413 70.08% 2,299,465 705,047 2026 60,463,539 72.95% 58,027,521 .70.01% 2,436,018 690,310 2027 62,579,763 72.95% 60,014,389 69.96% 2,565,374 671,873 2028 64,770,054 72.95% 62,081,599 69.92% 2,688,455 650,747 2029 67,037,006 72.95% 64,217,948 69.88% 2,819,058 630,647 2030 69,383,301 72.95% 66,431,836 69.85% 2,951,466 610,229 2031 69,868,207 70.98% 66,781,358 67.84% 3,086,849 589,852 2032 .70,122,087 68.82% 66,894,568 65.66% 3,227,519 569,992 2033 66,721,958 63.27% 63,358,949 60.08% 3,363,009 548,910 2034 62,987,707 57.71% 59,488,975 54.51% 3,498,732 527,784 2035 65,472,079 57.96% 61,844,717 54.75% 3,627,362 505,719 2036 65,058,318 55.65% 61,301,404 52.43% 3,756,914 484,086 2037 63,213,581 52.24% 59,324,086 49.02% 3,889,495 463,188 2038 58,980,901 47.09% 54,955,274 43.88% 4,025,627 443,068 2039 45,863,374 35.38% 41,696,851 32.17% 4,166,524 423,822 2040 42,349,557 31.57% 38,464,161 28.67% 3,885,396 365,273 Total APV 19,448,159 Cond- 14 -1 Section .14 Option IVA2: CHange Existing Plan to 3% Multiplier for all FS, Employees Eligible for NR Grandfathered Miami Beach Police 8. Fire Plan Projected Cost in Dollars . Option IVA2: Change Existing Plan to 3% Multiplier for all FS,. 75;000,000 EE's Eligible for NR Grandfathered 70,000,000 - 65,000,000 - —� 60,000,000 .. ............... . _. . _ : .__........_ . LL. _...._.. - -- - ..__...._ ... _.... - -- 55,000,000 _._.._..._.---.._..._: ............ ._....._........_....._...._.__ _.__......_..__._._..__._- ____.__._..._......_:.....__.._ __ _ . . .... _ 3 50,000,000 45,000,000 40,000,000 .................. .............:. ..._....._......._...:..... ............... ........... ....._....._....._.................... .................... .... _ .... . ......................... ..... _ ................... ......_..._......................... ................ _..._... ......... _ ................ ........ ........... _ ............ _ ._........_.: .......... ........ ........... 35,000,000 30 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 '30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses S Buyback) -$ Option IVA2 -$ 14 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option 1VA2: Change Existing Plan to 3% Multiplier for all FS, 80% EE's Eligible for NR Grandfathered 75% 70% 65% t. 60% z,. 55% 50% 45% 40% 35% 30% 25% ...._ .......................__................._......._..._....._............_..._..._...... ......... ............... ..... ...... ......... ... ._._,.... ... ..... ... ._..._ .............. .._ .... ......._....._...._.................... ...... ..... ...... ............. _._ ..... _. _. 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -% OptionIVA2 -% - - - = Conc* tS 14 -3 Option IVA2: Change Existing Plan to 3% Multiplier for all FS, EE's Eligible for. NR Grandfathered Current Plan Cost Current Plan Cost' Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVA2 -$ Option IVA2 -% Savings (Cost) (Cost) 33,593,541 70.28% 1,845,523 1,845,523 2010 35,439,063 74.14% 2011 37,226,360 75.25% 35,294,056 71.34% 1,932,304 1,785,863 2012 37,981,309 74.18% 35,950,252 70.21% 2,031,057 1,734,873 2013 38,660,638 72.95% 36,529,504. 68.93% 2,131,134 1,682,399 2014 40,013,760 72.95 %. 37,785,784 68.89% 2,227,976 1,625,554 2015 41,414,242 72.95% 39,092,844 68.86% 2,321,398 1,565,356 2016 42,863,740 72.95% 40,448,344 68.84% 2,415,396 1,505,306 2017 44,363,971. 72.95% 41,852,398 68.82% 2,511,573 1 2018 - 45,916,710 72.95% 43,304,690 68.80% 2,612,020 1,390;460 1 2019 47,,523,795 72.95% 44,803,780 68.77% 2,720,015 1,338,215 2020 49,187,128 72.95% 46,354,396 68.75% 2,832,732 1,288,050 2021 50,908,677 72.95% 47,959,507 68.72% 2,949,170 1,239,367 2022 52,690,481 72.95% 49,622,366 68.70% 3,068,115 1,191,639 2023 54,534,648 72.95% 51,345,330 68.68% 3,189,318 1,144,836 2024 56,443,360 72.95% 53,126,918 68.66% 3,316,442 1,100;248 2025 58,418,878 72.95% 54,969,207 68.64% 3,449,671, 1,057,715 2026 60,463,539 72.95% 56,877,685 68.62% 3,585,853 1,016,147 2027 .62,579,763 72.95% 58,852,593 68.60% 3,727,170 976,148 2028 64,770,054 72.95% 60,894,750 68.58% 3,875,304 938,027 2029 67,037,006 72.95% 63,006,014 68.56% 4,030,992 901,766 2030 69,383,301 72.95% 65,192;692 68.54% 4,190,609 866,427 2031 69;868,207 70.98% 65,513,305 66.55% 4,354,902 832,158 2032 70,122,087 68.82% 65,596,841 64.38% 4,525,246 799,176 2033 66,721,958 63.27% 62,025,956 58.82% 4,696,003 766,481 2034 62,987,707 57.71% 58,117,448 53.25% 4,870,259 734,679 2035 65,472,079 57.96% 60,427,969 53.49% 5,044,110 703,239 2036 65,058,318 55.65% 59,836,240 51.18% 5,222,078 672,875 2037 63,213,581 52.24% 57,808,132 47.77% 5,405,449 643,718 2038 58,980,901 47.09% 53,386,261 42.63% 5,594,640 615,756 2039 45,863,374 35.38% 40,072,922 30.91% 5,790,452 589,009 2040 42,349,557 31.57% 38,464,161 28.67% 3,885,396 365,273 Total APV 34,362,906 conceots 15 -1 Section 15 Option IVB1: Change Existing Plan to 2% Multiplier for all FS, Vested Employees Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVB1: Change Existing Plan to 2% Multiplier for all FS, Vested EE's Grandfathered 75,000,000 _..__........._._...._......._._:.__...._.._.._......_ .............. ....... ___.....____.....____.._ _.............._._____.._..__......_.._...._............___...._......_.__..__.__.._._.. .._..__._.__._..._..._......_�. 70,000,000 — 65,000, 000 _._.._________..____....._....__..__..._..._.._.._....._...__..__..__ ...,._..____._..___._.....__... ..:.__.._.. .:.--- _........._.......___.___ ._.__......._......_... ;:---- .....___ .___._._.._----- ___._.._._....: - __........ 60,000,000 55,000,000 50,000,000 45,000,000 40,000,000 35,000,000 30, 000,000 --__._.__ ................... ..... ..... .... __ ....................... ...... _ ..... ..____........._..._..__..._.-._ .......... ___._._ .... __ ...... _ ... __ .......... ......... ____ ... _,_ ................. _ .......... ___..__ ._......__..._._ ...... ...... __::_...-.---. ..._._.__._._ ........... _ -.._._ -- 25,000,000 10 11 12 13 14 15 16 17 18 19 20 2122 23 24 25 26 27 28 29 30 31 32 33.34 35 36 3738 39 40 Current Plan Cost (incl. expenses & Buyback) -$ OptionIVB1 -$ Conc *01.5 15 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IVBI: Change Existing Plan to 2% Multiplier for all FS; Vested EE's Grandfathered 80% 75% 70 ° /0 - - - - ...- -- __.__ __._ . ..... _....._._.- -- ----------------- ............. - ............. _ t 60% — 55% — 50 45% 35% _ ...........:.....................:. ........ ............................... ......_.....................:. _ ........ _.........:.._..._........._..__............._.............................:::.... ..................................... .....-........__................. ........._._ ............. .... .._..._...__.. 25% ...__ .... ..... ....... ....._.._._._.__ ..... ................ -......................_..._......_._.._.._..._...___.._....._-.._.._..._......_._.._....__._......._..__........_._....._...._...._......_._....._._...._.."...__......._._._._..._...._.............-_._"-----____.... .....__..- ...._.__....___...... ...__.__......_...... _ ........ .... .......-- ._._._........ 20% -- 15 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 s -Current Plan Cost (incl. expenses &Buyback) -% OptionlVB1 -% - - - - G®nCg 15 -3 Option IVBl: Change Existing Plan to 2% Multiplier for all FS, Vested EE's Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVBl -$ Option IVB1 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 33,205,899 69.47% 2,233,165 2,233,165 2011 37,226,360 75.25% 34,782,499 70.31% 2,443,861 2,258,652 2012 37,981,309 74.18% 35,231,589 68.81% 2,749,720 2,348,735 2013 38,660,638 72.95% 35,518,353 67.02% 3,142,284 2,480,640 201.4 40,013,760 72.95% 36,455,234 66.46% 3,558,526 2,596,337 2015 41,414,242 72.95% 37,446,857 65.96% 3,967,385 2,675,273 2016 42,863,740 72.95% 38,491,611 65.51% 4,372,129 2,724,767 2017 44,363,971 72.95% 39,577,204 65.08% 4,786,767 2,757,093 2018 45,916,710 72.95% 40,657,731 64.59% 5,258,979 2,799,519 2019 47,523,795 72.95% 41,684,271 63.99% 5,839,524 2,872,977 2020 49,187,128 72.95% 42,722,625 63.36% 6,464,503 2,939,426 2021 50,908,677 72.95% 43,809,100 62.78% 7,099,577 2,983,545 2022 52,690,481 72.95% 44,980,424 62.27% 7,710,057 2,994,542 2023 54,534,648 72.95% 46,247,534 61.86% 8,287,114 2,974,739 2024 56,443,360 72.95% 47,589,820 61.51% 8,853,540 2,937,212 2025 58,418,878 72.95% 48,956,969 61.13% 9,461,909 2,901,148 2026 60,463,539 72.95% - 50,416,999 60.83% 10,046,540 2,846,953 2027 62,579,763 72.95% 51,992,008 60.61% . 10,587,755. 2,772,940 2028 64,770,054 72.95% 53,683,842 60.46% 11,086,212 2,683,444 2029 67,037,006 72.95% 55,424,301 60.31% 11,612,706 2,597,858 2030 69,383,301 72.95% 57,236,170 60.18% 12,147,132 2,511,473 2031 69,868,207 70.98% 57,174,234 58.08% 12,693,974 2,425,633 2032 70,122,087 68.82% 56,860,057 55.81% 13,262,030 2,342,126 2033 66,721,958 63.27% 52,910,309 50.17% 13,811,649 2,254,335 2034 62,987,707 57.71% 48,624,307 44.55% 14,363,400 2,166,721 2035 65,472,079 57.96% 50,582,540 44.78% 14,889,539 2,075,868 2036 65,058,318 55.65% 49,637,805 42.46% 15,420,513 1,986,964 2037 63,213,581 52.24% 47,249,221 39.05% 15,964,360 1,901,146 2038 58,980,901 47.09% 42,457,788 33.90% 16,523,113 1,818,564 2039 45,863,374 35.38% 28,761,953 22.19% 17,101,422 1,739,569 2040 42,349,557 31.57% 26,043,236 19.41% 16,306,321 1,532,986 Total APV 77,134,350 - Zm - - - Conc DIES 16 -1 Section 16 Option IVB2: Change Existing Plan to 2% Multiplier for all FS, Employees Eligible for NR Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVB2: Change Existing Plan to 2% Multiplier for all FS, 75,000,000 _ ............. _....._..___ ..... _...._ EE's Eligible for NR Grandfathered ......... 70,000,000 65,000,000 __ ,_ -_ _.. ____ _ _.__._ _.___........_..- ... ....... ... . 60,000,000 55,000,000 50,000,000 — - 45,000,000 — 40,000,000 35,000,000 ......... ....... 3 .......... .......... ... .... ...... ............. ...... ...... ._ ... .. ............. _.. ..... _ ........ _._.... ._., __. ......_._ _ ............. _ _........... .. ......... _._.... 30,000,000 25,000,000 10 11 12 13 14. 15 1617 18 19 20 21 22 23 24 2526 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (ind. expenses & Buyback) -$ OptionIVB2 -$ 16 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option 1VB2: Change Existing Plan to 2% Multiplier for all FS, 80% EE's Eligible for NR Grandfathered 75% 70% __._ ............. _.. ..... . __ ._.... -------- _ --- --- ............... -- - ----- ..._. - --------- 65% 60 % -- - - -- - . _ ... . _ .. _ .. _......._..___ ..._. __ _ --- 50% 45% — t 40 % 35% 30% 25% 20% ................................. ... ......... ........ .... .... ............._.. .... .................._..............._......._............:..............................._............._.........................................................-......................._.................._................ ....... ....... . ..... .... ...... ....._........_. 15% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 °'Current Plan Cost (incl. expenses &Buyback)% 0ptionlVB2 -% - - - - C®ncpts 16 -3 Option 1VB2: Change Existing Plan to 2% Multiplier for all FS, EE's Eligible for NP Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVB2 -$ Option IVB2 -% Savings (Cost) (Cost) 2010 35,439,063 74.14 30,523,193 63.86% 4,915,870 4,915,870 2011 37,226,360 75.25% 32,011,324 64.70% 5,215,036 4,819,812 2012 37;981,309 74.18% 32,393,548 63.26% 5,587,761 4,772,910 2013 38;660,638 72.95% 32,674,494 61.65% 5,986,144 4,725;691 72.95% 33,643,225 61.34% 6,370,535 4,648,008 2014 40;013,760 2015 41,414,242 72.95% 34,681,817 61.09% 6,732,424 4,539,784 2016 42;863,740 72.95% 35,773,102 60.88% 7,090,638 4,418,977 2017 44,363,971 72.95% 36,906,993 60.69% 7,456,978 4,295,088 2018 45,916,710 72.95% 38,065;664 60.48% 7,851,046 4,179,357 2019 47,523,795 72.95% 39,220,133 60.20% 8,303,662 4,085,303 2020 49,187;128 72.95% 40,402,940 59.92% "8,784,188 3,994,193 2021 50,908,677 72.95% 41,629,047 59.65% 9,279,630 3,899;696 2022 52,690,481 72.95% .42,913,887 59.41% 9,776,594 3,797,173 2023 54,534,648 72.95% 44,264,302 59.21% 10,270,346 3,686,640 2024 56,443,360 ` 72.95% 45,642,795 58.99% 10,800;566 3,583,149 2025 58,418,878 72.95% 47,050,090 58.75% 11,368,788 3,485,822 2026 60,463,539 72.95% 48;525,227. 58.55% 11,938,312 3,383,037 2027. 62,579,763 72.95% 50,047,907 58.34% 12,531,855 3,282,101 2028 64,770,054 72.95% 51,603,084 58.12% 13,166,971 3,187,096 2029 67,037,006 72.95% 53,186,372 57.88% 13,850,635 3,098,502 2030 69,383,301 72.95% 54,841,961 57.66% 14,541,341 3,006,486 2031 69,868,207 70.98% 54,622,106 55.49% 15,246,102 2,913,308 2032 70,122,087 68.82% 54,143,220 53.14 %° 15,978,867 2,821,930 2033 66,721,958 63.27% 50,046,337 47.46% 16,675,622 2,721,793 2034 62,987,707 57.71% 45,618,468 41.80% 17;369,239 2,620,152 2035 65,472,079 57.96% 47,457,231 42.01% 18,014,848 2,511,592 2036 65,058,318 55.65 %° 46,397,118 39.68% 18,661,200 2,404,533 2037 63,213,581 52.24% 43,892,594 36.27% 19,320,987 2,300,876 2038 58,980,901 47.09% 38,983,680 31.13% 19,997,222 2,200;931 2039 45,863,374 35.38% 25,166,250 19.41% 20,697,124 2,105,326 2040 42,349,557 31.57% 26,043,236 19.41% 16,306,321. 1,532,986 Total APV 107,938,123 Ls 17 -1 Section 17 Option IVC1: Change Existing Plan to FAME High 5 for all FS, Vested Employees Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVC1: Change Existing Plan to FAME High 5 for all FS, Vested EE's Grandfathered 75,000,000 _.._......... ._....._......_ 70,000,000 65, 000, 000 60,000,000 -- 55,000,000 _._._.._.._...__....__._ ..............:..........__....._...._......_.._.__._..............._..___...... _ ..... .......... _ ... ..... -------- _..__...__ ... _.__ ... ........... _._............._............_.....____. .............. __._ ......... _ ...... .... _.._._ .................. _...... ..._.._._._..._... 50,000,000 45,000,000 40,000,000 35,000,000 ........ . ........................... ........... ................... _........_..._...... ............... _..........._........... ................. _..........................._................._.............. _..._ ............ .......... 30,000 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2627 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ 4?tionIVC1 -$ 17-2 Miami Beach Police & Fire Plan Projected Cost in Percentages* Option IVC1: Chan, ti Change Exisng Plan to FAME High 5 for all FS, Vested EE's Grandfathered 80% 75% 70% .... . ....... .... . . 65% 60% 55% 50% . .. ......... . .... . ........................ . ... ...... . ....... . .................. ... . .. . ....... ........ . . . .......... ........................ . ..... . ............. ..... . ........ . .. . . .............. . ..... . . ................... ...... . . . ......... .45% ........ .. . . .. . . ................. ............ - ------ ... ...... . ........ . ..... .... ..... ... ......... .................... ..... ........... 40% 35% 30% 25% 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses &Buyback)-% --!—OptionIVC1-% conctR 17 -3 Option IVC1: Change Existing Plan'to FAME High 5 for all FS, Vested EE's Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual . of Savings Year Buyback) -$ Buyback) -% Option IVC1 -$ Option IVCI -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 35,002,758 73.23% 436,305 436,305 2011 37,226,360 75.25% 36,754,876 74.29% 471,484 435,752 2012 37,981,309 74.18% 37,458,587 73.16% 522,722 446,495 2013 38,660,638 72.95% 38,071,141 71.84% 589,497 465,372 2014. 40,013,760 72.95% 39,353,443 71.75% 660,317 481,774 2015 41,414,242 72.95% 40,684,145 71.66% 730,096 492,316 2016 42,863,740 72.95% 42,064,334 71.59% 799,406 498,200 2017 44,363,971 72.95% 43,492,989 71.52% 870,982 501,671 2018 45,916,710 72.95% 44,964,454 71.44% 952,257 506,916 2019 47,523,795 72.95% 46,470,974 71.33% 1,052,821 517,975, 2020 49,187,128 72.95% 48,025,626 71.23% 1,161,502 528,138 2021 50,908,677 72.95% 49,635,985 •71.13% 1,272,692 534,840 2022 52,690,481 72.95% 51,309,533 71.04% 1,380,948 536,352 2023 54,534,648 72.95% 53,050,222 70.96% 1,484,426 532,849 2024 _ 56,443,360 72.95% 54,850,695 70.89% 1,592,666 528,376 2025 •58,418,878 72.95% 56,708,409 70.81% 1,710,469 524,453 2026 60,463,539 72.95% 58,638,512 70.75% 1,825,027 517,170 2027 62,579,763 72.95% 60,640,826 70.69% 1,938,937 507,809 2028 64,770,054 72.95% 62,714,471 70.63% 2,055,583 497,559 2029 67,037,006 72.95% 64,854,716 70.57% 2,182,290 488,196 2030 69,383,301 72.95% 67,074,021 70.52% 2,309,281 477,454 2031 69,868,207 70.98% 67,429,978 68.50 0/0 2,438,229 465,910 2032 70,122,087 68.82% 67,549,576 66.30% 2,572,512 454,316 2033 66,721,958 63.27% 64,025,618 60.72% 2,696,340 440,096 2034 62,987,707 57.71% 60,169,968 55.13% 2,817,739 425,056 2035 65,472,079 57.96% 62,546,458 55.37% 2,925,621 407,884 2036 65,058,318 55.65% 62,026,409 53.05% 3,031,909 390,668 2037 63,213,581 52.24% 60,073,922 49.64% 3,139,659 373,892 2038 58,980,901 47.09% 55,731,354 44.50% 3,249,547 357 2039 45,863,374 35.38% 42,500,093 32.79% 3,363,281 342,115 2040 42,349,557 31.57% 39,137,666 29.17% 3,211,892 301,956 Total APV 14,415,514 C®nC pts 18 -1 • Section 18 Option IVC2: Change Existing Plan to FAME High 5' for all FS, Employees Eligible for NR Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVC2: Change Existing Plan to FAME High 5 for all FS, 75,000,000 EE's Eligible for NR Grandfathered _ 70,000,000 65,000,000 — - N. 60,000,006 "— 55,000,000 50,000,000 r 45, 000,000 -_...._____.__.___.._._: ....._._._._____...---- ._.__ -._ ---._. . _._ ...... - ... ............... _.._..__.....__...___-_ ......... _.... _. .......... ___ .................. . ... _...__.._...._.___._..._._._.., . .____._--- ._._...__..._._....._ 40,000,000 _._.._ ..._.- _ -.... ......_ - ______ _ . .................... _:_ ........... _ .... _..__ _ _ . ............ __ ............. ..... _._....._...__ _ _ _ ... _......_ ... ... ... _ . _._...._..:._ 35,000,000 30,000,000 25,000,000 10 11 12 13 1415 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 ' Current Plan Cost (incl. expenses & Buyback) -$ Option IVC2 -$ Conce 18-2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IVC2: Change Existing Plan to FAME High 5 for all FS, 80% EE's Eligible for NR Grandfathered 75% . . .... . ....... . .... — ---------- .... . .. . ..... . ..................... . ....... . 70% 65% 60% 55% 50% --- -- - . ... .. .. . ... .. .... ........... . . .... .. .......... .. .... . ... .......... 45% 40% 35% 30% 25% 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 ­v­ Current Plan Cost (incl. expenses & Buyback-)-% Option IVC2-% Conp* DVS 18 -3 Option IVC2: Change Existing Plan to FAME High 5 for all FS, EE's Eligible for NR Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVC2 -$ Option IVC2 -% Savings (Cost) (Cost) 2010. 35,439,063 74.14% 34,552,299 72.29% 886,764 886,764 2011 37,226,360 75.25% 36,296,527 , 73.37% 929,833 859,365 20.12 37,981,309 74.18% 36,997,364 72.25% 983,945 840,458 2013 38,660,638 72.95% 37,612,058 70.97% 1,048,580 827,789 2014 40,01.3,760 72.95% 38,897,735 70.91% 1,116,025 814,263 2015 41,414,242 72.95% 40,230,900 70.86% 1,183,342 797,947 2016 42,863,740 72.95% 41,612,545 70.82% 1,251,195 779,761 2017 44,363,971 72.95% 43,042,380 70.78% 1,321,591 761,213 2018 45,916,710 72.95% 44,517,935 70.73% 1,398,775 744,611 2019 47,523,795 72.95% 46,034,417 70.66% 1,489,378 732,756 2020 49,187,128 72.95% 47,600,832 70.60% 1,586,295 721,293 2021 50,908,677 72.95% 49,222,440 70.53% 1,686,237 708,629 2022 52,690,481 72.95% '50,904,347 70.48% 1;786,134 693;724 2023' 54,534,648 72.95% 52,649,972 70.43% 1,884,676 676,522 2024 56,443,360 72.95% 54,452,014 70. 38% 1,991,346 660,640 2025 58,418,878 72.95% 56,312,304 70.2% 2,106,574 645,904 2026 60,463,539 72.95% 58,242,097 70.27% 2,221,442 629,504 2027 62,579,763 72.95% 60,238,453 70.22 °0 2,341,310 613,191 2028 64,770,054 72.95% 62,299,695 70 2,470,359 597,956 2029 67,037,006 . 72.95% 64,426,773 70.11% 2,610,234 583,931 2030 69,383,301. 72.95% 66,632,345 70.06% 2,750,956 568,772 2031 69,868,207 70.98% 66,974,029 65.04% 2,894;178 553,035 2032 70,122,087 68.82% 67,078,874 65.84% 3,043,213 537,443 2033 66,721,958 63.27% 63,539,275 60.25% 3,182,684 519,477 2034 62,987,707 57.71% 59,667,269 54.67% 3,320,439 500,889 2035 65,472,079 57.96% 62,026,391 54.91% 3,445,688 480,390 2036' 65,058,318 55.65% 61,488,236 52.59% 3,570,082 460,012 2037 63,213,581 52.24% 59,516,953 49.18% 3,696,628 440,220 2038 58,980,901 47.09% 55 44.04% 3,826,010 421,098 2039 ' 45,863,374 35.38% 41,903,454 32.33% 3,959,920 402,806 2040 42,349,557 31.57% 39,137,666 29.17% 3,211,892 301,956 Total APV 19,762,322 ___ Conce 19 -1 Section 19 Option IVD1: Change Existing Plan to 1.5% COLA, Vested Employees Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars l OptionlVDI: Change Existing Plan to 1.5% COLA, Vested EE's Grandfathered 75,000,000 70,000,000 — 65,000,000 ......... .... ... _ . ..._ .. 60,000,000 55,000,000 50,000,000 -- 45,000,000 40,000,000 35,000,000 _....._.__.,.. ....... _ ..... _.__ .......... ....._ ............ _-..------_-__ .... - ........ ..... _ .......................... __.__......._.__.._..._-___.._._.._...._.._._..... ...... - ..... ._.._...__....__.._.___.. __...._.._...._.._----- _....__ .... --- ___...:._.__.__. 30,000,000 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ OptionIVD1 -$ Conc 10 LS 19 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IVD1: Change Existing Plan to 1.5 9 % COLA, Vested EE's Grandfathered 80% — 75% x s " n -x. 70% 65% 60% 55% 50% ........ -- - _....... - - ... . ............ _ - ........ 45% . _..__.. .... ..........._.._..... ... .. ......:.........._............_ _......................._..__......_..... ........_... .... .............._._._._........ .. ........ ..,.._.............. .. _ ...._. _ _....._.._. .._ _ _ _ . ___.. _ ......_ ...... . __ -. ___..... ___.� 30% 25% 20 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses 8- Buybad:) -% OptionIVDI -% r-T - - - - C®nce —w15 0 19 -3 Option IVD1: Change Existing Plan to 1,5% COLA, Vested EE's Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVDl -$ Option IVD1 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 34,636,516 72.46% 802,547 802,547 2011 37,226,360 75.25° 36,361,093 7350% 865,268 799,693 2012 37,981,309 74.18% 37,028,447 72.32% 952,862 813,908 2013 38,660,638 72.95 0 /o 37,597,627 70.94% 1,063,011 839,182 2014 40,013,760 72.95% 38,834,1.82 70.80% 1,179,578 860,632 2015 41,414,242 72.95% 40,119,717 70.67% 1,294,525 872,919 2016 42,863,740 72.95 0 /0 41,455,037 70.55% 1,408,703 877,922 2017 44,363,971 72.95% 42,838,287 70.44% 1,525,684 878,767 2018 45,916,710 72.95% 44,258,813 70.32% 1,657,897 882,550 2019 47,523,795 72.95% 45,705,490 70.16% 1,818,305 894,585 2020 49,187,128 72.95% 47,196,654 70.00% 1,990,474 905,073 2021 50,908,677 72.95% 48,743,162 69.85% 2,165,515 910,042 2022 52,690,481 72.95% 50,356,065 69.72% 2,334,415 906,674 2023 54,534,648 72.95% 52,039,683 69.61% 2,494,965 895,592 2024 56,443,360 72.95% 53,791,198 69.52% 2,652,162 879,870 2025 58,418,878 72.95% 55,598,625 69.43% 2,820,253 864,727 2026 60,463,539 72.95% 57,480,983 69.35% 2,982,555 845,186 2027 62;579,763 72.95% 59,446,698 69.30% 3,133,064 820,552 2028 64,770,054 72.95% 61,498,607 69.26 % 3,271,448 791,862 2029 67,037,006 72.95% _ 63,620,261 69.23% 3,416,746 764,354 2030 69,383,301 72.95% 65,818,506 69.20% 3,564,795 737,037 2031 69,868,207 70.98% 66,151,580 67.20% 3,716,628 710,193 2032 70,122,087 68.82% 66,247,851 65.02% 3,874,236 684,205 2033 66,721,958 63.27% 62,693,121 59.45% 4,028,838 657,586 2034 62,987,707 57.71% 58,802,660 53.88% 4,185,047 631,315 2035 65,472,079 57.96% 61,135,347 54.12% 4,336,732 604,618 2036 65,058,318 55.65% 60,567,612 51.80% 4,490,706 578,637 2037 63,213,581 52.24% 58,564,781 48.40% 4,648,799 553,611 2038 58,980,901 47.09% 54,169,394 43.25% 4,811,507 529,563 2039 45,863,374 35.38% 40,883,464 3154% 4,979,910 506,560 2040 42,349,557 31.57% 37,694,058 28.10% 4,655,499 437,672 Total APV 23,737,634 - - - - ConC ptS 20 -1 Section 20 Option IVD2: Change Existing Plan to 1.5% COLA, Employees Eligible for NR Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVD2: Change Existing Plan to 1.5% COLA, EE's Eligible for NR Grand fathered 75,000,000 ........................ _... ....... ....._.. 70,000,000 65,000,000 60,000,000 - .. ...... _ ........... .... .... ............ __ ... .. ... _.:..:. __.. _..__.. ............ _ ......__.._..... S 55,000,000 __.__._.._._......_.._....__._....._._._..__....._._. ......................._..........._. ..._...._.__....._..__._...__._ , h 50,000,000 .............. _....... - - -..._ _. _ ......... _. _.. .......... .._. _ ...... - -- ...._. . .......... ........ _._:......... .._ _._ 45,000,000 40,000,000 35,000,000 30;000,000 25,000,000 10 11 12 13 14 15 16.17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ Option IVD2 -$ A. { 20 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Op tion IVD2: Change Existing Plan to 1.5% COLA, EE's Eligible for NR Grandfathered 80% — . _�__ _ _. _ 75% 70% 65 /o _..^ ._. ......._... . _.._ ............ _. _ _.... -. _._._.. _._._._ _ _............_.... -'- ...._. ^o N 55% -- 50% 45% 40% `E 30% 25% 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses &Buyback)% 0ptionND2 -% conce -lb 20.3 Option IVD2: Change Existing Plan to 1.5% COLA, EE's Eligible for NR Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVD2 -$ Option IVD2 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 32,932,490 68.90% 2,506,573 2,506,573 2011 37,226,360 75.25% 34,600,649 69.94% 2,625,711 2,426,720 2012 37,981,309 74.18% 35,222,147 68.79 0 /0 2,759,162 2,356,800 2013 38,660,638 72.95% 35 67.50% 2,889,037 2,280,717 2014 40,013,760 72.95% 37,002,084 67.46% 3,011,676 2,197,350 2015 41,414,242 72.95% 38,285,916 67.44% 3,128,326 2,109,482 2016 42,863,740 72.95% 39,618,302 67.43% 3,245,438 2;022,599 2017 44,363,971 72.95% 40,999,307 ` 67.42% 3,364,664 1,937,987 201.8 45,916,710 72.95% 42,429,416 67.41% 3,487,294 1,856,396 2019 47,523,795 72.95% 43,908,425 67.40% 3;615,370 1,778,719 2020 49,187,128 72.95% 45,439,275 67.39% 3,747,853 1,704,158 2021 50,908,677 72.95% 47,023,887 67.38% 3,884,790 1,632,554 2022 52,690,481 72.95% 48,664,744 67.38% 4,025,737 1,563,573 2023 54,534,648 72.95% 50,363,689 67.37% 4,170,959 1,497,206 2024 56,443,360 72.95% 52,121,732 67.36% 4,321,628 1,433,725 2025 58,418,878 72.95% 53,941,061 67.36% 4,477,817 1,372,958 2026 60,463,539 72.95% 55,824,635 67.35% 4,638,903 1,314,556 2027 62,579,763 72.95% - 57,774,031 67.35% 4,805,732 1,258,624 2028 64,770,054 72.95% 59,791,126 67.34% 4,978,929 1,205,161 2029 67,037,006 72.95% 61,878,150 67.34% 5,158,856 1,154,079 2030 69,383,301 72.95% 64,038,650 67.33% 5,344,651 1,105,030 2031 69,868,207 70.98% 64,331,515 65.35% 5,536,693 1,057,981 2032 70,122,087 68.82% 64,386,547 63.19% 5,735,540 1,012,919 2033.. 66,721,958 63.27% 60,782,179 57.64% 5,939,780 969,490 2034 62,987,707 57.71% 56,837,240 52.08% 6,150,468 927,799 2035 65,472,079 57.96% 59,105,387 52.32% 6,366,692 887,631 2036 65,058,318 55.65% 58,468,389 50.01% 6,589,929 849,126 2037 63,213,581 52.24% 56,392,836 46.60% 6,820,745 812,261 2038 58,980,901 47.09% 51,921,430 41.46% 7,059,471 776,978 2039 45,863,374 35.38% 38,556,821 29.74% 7,306 743,228 2040 42,349,557 31.57% 37,694,058 28.10% 4,655,499 437,672 Total APV 45,190,053 Conceots 21 -1 Section 21 Option IVE1: Change Existing Plan to No COLA, Vested Emplo37ees Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVE1: Change Existing; Plan to No COLA, Vested EE's Grandfathered 75,000,000 - ...... - - -- --...._._._............._.._ ..............._......._.........._...__.........._.......__._............._........_........_......__... ...... ... ... ......_.._.__...._...................__ .._..._..._._..._.............. ....._.._.:..........._._............._ ......._:_._._._........._...._ ._...__..... _. ----- .--------- 70,000,000 65,000,000 60,000,000 55,000,000 - 50,000,000 45,000,000 —� 40,000,000 — 35,000,000 ...... __.. ...... .. ........... -_. ... _ .... _ ......... _ ... _ ...... _ ......................... _._ ......... _ .... _._ .............._.____....___.._............_.._......._..._..._._._._.._.__._._._........-----_..__.__.__..._.._......_..__...._..___._.._._._..__..__-_.. .._._..._._....._,___...._._.._ _..._.... 30,000,000 _.._..._.....__._..__._...___.._..___.__..._.._..._.....e ........ _:_:_..._._.-____ .............. -..........._._._.. ...__._.....__:_._____..._____. ._._....._.__.......__...... ... .._....._.....---.._..__ ..... _ ... ._................. ... _.._ ........ ........... _.__. .._.___..._._.._........ _ ..... . 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ OptionIVE1 -$ - - - - C®ncpts 21 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IVEl: Change Existing Plan to No COLA, Vested EE's Gran( fathered 80% 70-%- _.__..._.. _ __._._. ___. .._ .............. ......... 70% 65% 60% 55% — • 50% ' _ ........................................._._..._.... ...... ..... ...... ........ ............._......_ .... ............._...._........._..._...................._..._..:..._..._......._........... ..... ....... .... .... ..__.._.._................._.................. ..... ....... ......_ .... .... ......_.: ... ........__... _...................._ .... ' ......... ............................... 45% _._......__._.....__...._._.__._.___._......_.__.._.__..._.._...._._...__.._._.._...._...._.._.._...__._._..---- ..............._.......__........._.._...._...._......_...._.._.._.._._.___.____............__...._.._....____..__._._._.__----- .._.._.__._..___._._._.....T y 40% 35% — 30% _...........__.._..__._....----.--..._..._. ...__..._..._.._:___........._. _. _. __._._ _. _. __. _._._._ ._. _. 25% 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses &Buyback) -% OptionIVE1 -% - - - - C®nceps 21 -3 Option 1VE1: Change Existing Plan. to No COLA, Vested EE's Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVE1 -$ Option IVEl -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 33,660,923 70.42% 1,778,141 1,778,141 2011 37,226,360 75.25% 35,299,960 71.35% 1,926,400 1,780,407 2012 37,981,309 74.18% 35,847,513 70.01% 2,133,796 1,822,630 2013 38,660,638 72.95% 36,267,156 68.43% 2,393,482 1,889,506 2014 40,013,760 72.95% 37,345,450 68.08% 2,668,310 1,946,826 2015 41,414,242 72.95% 38,475,324 67.77% 2,938,918 1,981,760 2016 42,863,740 72.95% 39,656,434 67.49% 3,207,306 1,998,834 2017 44,363,971 72.95% 40,882,548 67.22% 3,481,423 2,005,238 2018 45,916,710 72.95% 42,124,964 66.93% 3,791,746 2,018,465 2019 47,523,795 72.95% 43,356,181 66.55% 4,167,614 2,050,417 2020 49,187,128 72.95% 44,616,640 66.17% 4,570,488 2,078,213 2021 50,908,677 72.95% 45,929,736 65.81% 4,978,941 2,092,363 2022 52,690,481 72.95% 47,319,564 65.51% 5,370,917 2,086,034 2023 54,534,648 72.95% 48,792,975 65.27% 5,741,673 2,061,029 2024 56,443,360 - 72.95% 501348,623 65.07% 6,094,737 2,021,964 2025 58,418,878 72.95% 51,948,892 64.87% 6,469,986 1,983,784 2026 60,463,539 72.95% 53,633,284 64.71% 6,830,255 1,935,534 2027 62,579,763 72.95% 55,427,209 64.61% 7,152,554 1,873,258 2028 64,770,054 72.95% 57,338,778 64.58% 7,431,276 1,798,758 2029 67,037,006 72.95 59,318,480 64.55% 7,718,527 1,726,698 2030 69,383,301 72.95% 61,369,529 64.52% 8,013,773 1,656,883 2031 69,868,207 70.98% 61,550,088 62.53% 8,318,119 1,589,471 2032 70,122,087 68.82% 61,488,563 60.35% 8,633,524 1,524,714 2033 66,721,958 63.27% 57,769,504 54.78% 8,952,455 1,461,218 2034 62,987,707 57.71% 53,708,514 49.21% 9,279,193 1,399,768 2035 65,472,079 57.96% 55,863,522 49.45% 9,608,557 1,339,605 2036 65,058,318 55.65% 55,111,531 47.14% 9,946,787 1,281,664 2037 63,213,581 52.24% 52,917,847 43.73% 10,295,734 1,226,087 2038 58,980,901 47.09% 48,324,817 38.58% 10,656,085 1,172,828 2039 45,863,374 35.38% 34,834,327 26.87% 11;029,048 1,121,883 2040 42,349,557 31.57% 32,040,378 23.88% 10,309,180 969,184 Total APV 53,673,164 22 -1 Section 22 Option IVE2: Change Existing Plan to No COLA, Employees Eligible for NR Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVE2: Change Existing Plan to No COLA, EE's Eligible for NR Grandfathered 75,000,000 70,000,000 65,000,000 - 60,000,000 55,000,000 - 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 10.11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 .27 2829 30 31 32 33 34 35 36 37 38 39,40 Current Plan Cost (incl. expenses & Buyback) -$ Option NE2 -$ Conc pt 22 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages I OptionlVE2: Change Existing Plan to No COLA, EE's Eligible for NR Gran dfa thered 80% 75% X 70% 65% ....._._.__..,..__..._.......__._........__._..... __ ..................... ._._ ........ ...... ._._ ._..._:.........._..._..... - .... _.._.._..........._._._ 600' ....... ._.... ... ........ ._ ......... .... _ ............. _ ................. _. .... ..... 55% 50% . 4 45% ...__ ........................ .._._.......................... .._......._......__._.._..__..._........._.__....................... _..._......._.._..__........... _........ _...._._..............................._................_._...__......_._.._.......... ..._....._.._.................: .....: ..... .............._...__..__...`4'- 40% --- . 4. 35% 30% 25% 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses &Buyback) -% OptionIVE2 -% - - - - Conn 015 22 -3 Option IVE2: Change Existing Plan to No COLA, EE's Eligible for NR Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses& (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVE2 -$ Option IVE2 -% Savings (Cost) (Cost) 2010. 35,439,063 74.14% 29,889,218 62.53% 5,549,845 5,549,845 2011 37,226,360 75.25% 31,393,688 63.46% 5,832,672 5,390,639 2012 37,981,309 74.18% 31,828,575 62.16% 6,152,734 5,255,494 2013 38,660,638 72.95% 32,202,550 60.76% 6,458,088 5,098,262 2014 40,013,760 72.95% 33,273,998 60.66% 6,739,762 4,917,400 2015 41,414,242 72.95% 34,412,270 60.62% 7,001,971 4,721,544 2016 42,863,740 72.95% 35,600,498 60.59% 7,263,242 4,526,546 2017 44,363,971 72.95% 36,836,118 60.57% 7,527,853 4,335,911 2018 45,916,710 72.95% 38,118,193 60.56% 7,798,517 4,151,394 2019 47,523,795 72.95% 39,444,201 60.55% 8,079,594 3,975,065 2020 49,187,128 72.95% 40,817,541 60.54% 8,369,587 3,805,673 2021 50,908,677 72.95% 42,239,399 60.53% 8,669,278 3,643,200 2022 52,690,481 72.95% 43,712,500 60.52 8,977,981 3,486,997 2023 54,534,648 72.95% 45,237,982 60.51% 9,296,666 3,337,128 2024 56,443,360 72.95% 46,816,849 60.51% 9,626,511 3,193,650 2025 58,418,878 72.95% 48,451,346 60.50% 9,967,532 3,056,178 2026 60,463,539 72.95% 50,143,715 60.50% 10,319,823 2,924,395 2027 62,579,763 72.95% 51,895,236 60.49% 10,684,527 2,798,284 2028 64,770,054 72.95% 53,707,644 60.49% 11,062,411 2,677,683 2029 67,037,006 72.95% 55,582,960 60.49% 11,454,046 2,562,365 2030 69,383,301 72.95% 57,524,250 60.48 % 11,859,051 2,451,911 2031 69,868;207 70.98% 57,590,178 58.50% 12,278,030 2;346,152 2032 70,122,087 68.82/ 57,410,348 56.35% 12,711,739 2,244,943 2033 66,721,958 63.27% 53,562,562. 50.79% 13,159,396 2,147,875 2034 62,987,707 57.71% 49,365,535 45.23% 13,622,172 2,054,907 2035 65,472,079 57.96% 51,372,378 45.48% 14,099,701 1,965,750 2036 65,058,318 55.65% 50,464,81.1 43.16% 14,593,507 1,880,403 2037 63,213,581, 52.24% 48,109,169 39.76% 15,104,412 1,798,737 2038 58,980,901 47.09% 43,347,835 34.61% 15,633,066 1,720,604 2039 45,863,374 35.38% 29,683,151 22.90% 16,180,224 1,645,864 2040 42,349,557 31.57% 32,040,378 23.88 0 o 10,309,180 969,184 Total APV 100,633,984 - - - - Concepts 23 -1 Section 23 Option IVF1: Change Existing Plan to 55 &10 or 52 &25, Vested Emplovees Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVF1: Change Existing Plan to 558:10 or 52 &25, Vested EE's Grandfathered 75,000,000 --. _.....__...._.. .. ........ ... ...... .........._.......__...................__........._..............................................._...._........................_...._......._.............__...._._.._...........:... ...... --_........_.___.__....__..... .._...._....................:_. 70,000,000 -._..__--.__.__...._.....____._....._ ..............__._.._.__..._.._..._....__..._._.._.._....__.._..._.___._.___._...._...._...__....---...__-.__.._..._.___.._._._.. .__..........._......_.._....__ 65,000,000 60,000,000 55,000,000 . ... ............._ ... .... ........ ........... ............... ..... .... ............ ................ ....... ........ ........ _ ............ _ .... .. ........... .... .. .... ............ .._.- ...._...... .:..........:........ 50,000,000 — — 45,000,000 40,000,000 35,000,000 30,000,000 ...___--------- ....__ --- ._.......___._ ........... __ ..... _ ...... ...... _ ...... ... - -------- __ ........... ..... _ ..... _ ............ _ . ....... .............._........._....._........_...._..--....-..-..__..._._.-.-....__._...:_...._._.._.._....._.__._._...._ ....____- .......- _.......... - -- - ...... 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2627 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ 0ptionIVF1 -$ - - - = C®nc pis 23 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option fVF1: Change Existing Plan to 55 &10 or 52 &25, Vested EE's Grandfathered 80% 75 %� Ea 65% 60% 55 % 50 _.__:.......... _.. _.__...._._......_.._._.......:.._..._.__....._..........._._......_..._._._._... .._......_..._._.._._......_... ..._...:. . ............ ..._..... ......__._.__.......--- ........ ........_......---- ...._... - - -- _.._...._ ----- .. 45% 40 /°° ......... . ..................... .............. .......... ............................... ._._.........................._...__.._.................. ._....... ............ .._...._..._..._.....__........................_ ................... ........................ .................... ...._.............. _. ................................ _ ... ... ._ .............................. .................. _.._ ............................ .... ......._........._. 35% -_._...._ .... ..... . ._._.._._...._ ...... _ ... _.. _ _- _.... __ __:._._ _ ....... ....._. ........ ...... _ . . .. .. .. . .._ ._. _ . ... ___ -- ... . _.._. __....._.__.._. __ .. ..._....___.__.__.......__._._. _ ........... ......_... 30% 25% 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 9 Current Plan Cost (ind. expenses & Buyback) -% 0ption1VF1 -% Conn pis 23 -3 Option IVF1: Change Existing Plan to 55 &10 or 52 &25, Vested EE's Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVFl -$ Option IVF1 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 34,450,821 72.07% 988,242 988,242 2011 37,226,360 75.25% 36,158,400 73.09% 1,067,960 987,024 2012 37,981,309 74.18% 36,801,453 71.87% 1,179,856 1,007,800 2013 38,660,638 72.95% 37,339,806 70.46% 1,320,832 1,042,716 2014 40,013,760 72.95% 38,543,699 70.27% 1,470,061 1,072,572 2015 41,414,242 72.95% 39,797,136 70.10% 1,617,106 1,090,441 2016 42,863,740 72.95% 41,100,672 69.95% 1,763,068 1,098,767 2017 44,363,971 72.95% 42,451,434 69.80% 1,912,537 1,1.01,587 2018 45,916,710 72.95% 43,835,033 69.64% 2,081,677 1.,108,142 2019 47,523,795 72.95% 45,236,612 69.44% 2,287,182 1,125,267 2020 49,187,128 72.95% 46,679,335 69.23% 2,507,793 1,140,300 2021 50,908,677 72.95% 48,176,709 69.03% 2,731,968 1,148,089 2022 52,690,481 72.95% 49,742,499 68.87% 2,947,982 1,144,980 2023 54,534,648 72.95% 51,381,643 68.73% 3,153,005 1,131,802 2024 56,443,360 72.95% 53,090,425 68.62% 3,352,936 1,112,355 2025 58,418,878 72.95% 54,852,235 68.50% 3,566,643 1,093;581 2026 60,463,539 72.95% 56,690,857 68.40% 3,772,682 1,069,089 2027 .62,579,763 72.95% 58,617,096 68.33% 3,962,667 1,037,825 2028 64,770,054 72.95% 60,634,222 68.29% 4,135,832 1,001,088 2029 67,037,006 72.95% 62,719,688 68.25% 4,317,319 965,820 2030 69,383,301 72.95% 64,880,928 68.22% 4,502,373 930,885 2031 69,868,207 70.98% 65,175,971 66.21% 4,692,236 896,618 2032 70,122,087 68.82% 65,232,792 64.03% 4,889,295 863,468 2033 66,721,958 63.27% 61,638,872 58.45% 5,083,086 829,661 2034 62,987,707 57.71% 57,708,584 52.87% 5,279,123 796,356 2035 65,472,079 57.96% 60,001,974 53.12% 5,470,105 762,630 2036 65,058,318 55.65% 59,394,150 50.80% 5,664,168 729,840 2037 63,213,581 52.24% 57,350,071 47.39% 5,863,510 698,267 2038 58,980,901 47.09% 52,912,169 42.25% 6,068,732 667,936 2039 45,863,374 35.38% 39,582,236 30.54% 6,281,138 638,922 2040 42,349,557 31.57% 36,487,922 27.20% 5,861,635 551,063 Total APV 29,833,132 Conn ots 24 -1 Section 24 Option IVF2: Change Existing Plan to 55&10 or 528:.25, Employees Eligible for NR Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVF2: Change Existing Plan to 55 &10 or 52 &25, EE's Eligible for NR Grandfathered 75,000,000 -- — 70,000,000 65,000,000 60,000,000 - 55,000,000 -- 50,000,000 IRU 45,000,000 _.....__......._.... ...... . _. __._..__.__._....___ ............. - .... ......... _.__......_ ........ .__.......___...__ ............. - ... - ...... _.- ............ ......... _ ..............___....__:- 40,000,000 ------- . ............ ...... ....... . ... _ ......... ... _ ......... ._.. _...._.............. ------- -....._._........_.__...._. .................... ..... _ ... _ ........ _ ......... ._..._._...___... ._... ........ .._........ _ .... - -- __... .- _ ........... _.._ ....... .... 35,000,000 30,000,000 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ Option fVF2 -$ - - - - Con ots 24-2 Miami Beach Police & Fire Plan Projected Cost in Percentages F2: Change Existing Plan to 55&10.or 52&25,EE's Eligible for NR Grandfathered Option TV 0 0 1 80% . . .. .............. .. ... ------- 75 %:: --------- ------ - - ------ - -------- - ---- - - - ----------- ------- "N 70% ........ . . .. . . .... . - - --- ------- . .... . ... . . ...... . ...... ... . ...... 65% 60% 55% 50% 45% 40% 35% . .. .. . ... . . .. .................. ...... . . . . . . .. .................... ... .. .. - .......... .......... 30% 25% ........... . .. . . ........ .... ... . ......... ....... . .. .............. ..... .. ..... .. .... ... .. - — - . . .. . . ..... ................. ....... .... .. -- ---- . . . . . . . . . .... . .......... . ...... . .. 20% 10 11 12 13 14 15 16 17 18 19.20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (ind. expenses & Buybad-,)-% OptionlVF2-% Conc ts 24 -3 Option IVF2: Change Existing Plan to 55510 or 52 &25, EE's Eligible for NR Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVF2 -$ Option IVF2 -% Savings (Cost) (Cost) 2010 35 74.14% 32,003,876 66.95% 3,435,188 3,435,188 2011 37,226,360 75.25% 33,627,022 67.97% 3,599,338 3,326,560 2012 37,981,309 74.18% 34,198,513 66.79% 3,782,796 3,231,160 2013 38,660,638 72.95% 34,700,788 65.48% 3,959,850 3,126,057 2014 40,013,760 72:95 35,887,691 65.43% 4,126,069 3,010,422 2015 41,414,242 72.95% 37,130,672 65.40% 4,283,570 2,888,481 2016 42;863,740 72.95% 38,422,173 65.39% 4,441,567 2,768,042 2017 44,363,971 72.95% 39,761,753 65.38% 4,602,218 2,650,796 2018 45,916,710 72.95% 41,149,801 65.38% 4,766,909 ' 2,537,574 2019 47,523,795 72.95% 42;585,948 65.37% 4,937,847 2,429,362 2020 49,187,128 72.95% 44,072,811 65.36% 5,114,316 2,325,493 2021 50,908,677 72.95% 45,611,939 65.36% 5,296,738 2,225,915 2022. 52,690,481 72.95% 47,205,675 65.36% 5,484,806 2,130,267 2023 54,534,648 72.95% 48,855,607 65.35% 5,679,041 2,038,546 2024 56,443,360 72.95% 50,563,275 65.35% 5,880,085 1,950,752 2025 58,418,878 72.95% 52,330,887 65.35% 6,087,991 1,866,659 2026 60,463,539 72.95% 54,160,703 65.35% 6,302,836 1,786,076 2027 62,579,763 72.95% 56,054,519 65.34% 6,525,244 1,708,965 2028. 64,770,054 72.95% 58,014,405 65.34% 6,755,649 1,635,221 2029 67,037,006 72.95% 60,042,616 65.34% 6,994,390 1,564,703 2030 69,383,301 72.95% 62,141,989 65.34% 7,241,313 1,497,173 2031 69,868,207 70.98% .62,371,434 63.36 %. 7,496,774 1,432,524 2032 70,122,087 68.82% 62,360,877 61.21% 7,761,210 1,370,660 2033 66,721,958 63.27% 58,687,691 55.65% 8,034,267 1,311,352 2034 62,987,707 57.71% 54,671,109 50.09% 8,316,598 1,254,560 2035 65,472,079 57.96% 56,864,012 50.34% 8,608,067 1,200,118 2036 65,058,318 55.65% 56,148,806 48.02% 8,909,512 1,148,009 2037 63,213,581 52.24% 53,992,167 44.62% 9,221,414 1,098,149 2038 58,980,901 47.09% 49,436,738 39.47% 9,544,163 1,050,448 2039 45,863,374 35.38% 35,985,165 27.76% 9,878,209 1,004,819 2040 42,349,557 31.57% 36,487,922 27.20% 5,861,635 551,063 Total APV 61,555,116 25 -1 Section 25 Option IVG1: Change Existing Plan Normal Form. to Life Annuity, Vested EE's Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVG1: Change Existing Plan Normal Form to Life Annuity, Vested EE's Grandfathered 75,000,000 -- ._.. ..... . _ ........ ..... . .. _.._.... _.. ....................... ._ ........... .......... 70, 000, 000 -......._._....__........___.___..._._._....___.._.._......_..:.._.:........_._._.._.___......._...__.._..-_._._..._..__._._.-_.__..____.......__..___._......._._.._..__.._.___.___._..........._._._......-......_. y ..._.......__.__._............_........ ... _ -------- -_....__ _....._....:..__._..____....... 65,000,000 60,000,000 55,000,000 .............. ..... .................. ........ _ .. ... . ... . .......... .... ....... ...... _ ..... .. 50,000,000 - - 45,000,000 40,000,000 -- - 35,000,000 30,000,000 _....._......_........_..__.._.....__....._.._.__...._...._ ...................__..........._...._._...... ...._.._..._..__._......- .._... - -- - ... _._.._..._..........------ ....._._....---- .....__-- -:_ - -- - -....._.__ .... - - __. ........... __........- _ .............. _.. ..__.._ ........ .. 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 '23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ - OptionIVG14 - - - - C©nc��5 25 -2 . Miami Beach Police & Fire Plan Projected Cost in Percentages Option IVG1: Change Existing Plan Normal Form to Life Annuity, Vested EE's Grandfathered 70% 65 %; 60% 50% _ ... _ - -- ---- - - _------- - - - - - - - ..._.._...:. - ........ ............... ..... - -- _ ............ ..... _ .......... ... __ ...... _............ . .. a r _..._........._. 45 % z, a ............... ....... ..........._....................-............ .................... ... ...... .. ..... ...:............:......_........,..........:........_.............._.._.......:.. .... .:._-.. ....... ._... .... ......... .............._............................. .... ..-- ... ..... ..._..._.._........... _.._....:.._................. . .......... . . _ -.. - "" ._ - . _...._. -..... _........ . ,.__...- -- - -- _ _._..... _........... _ ... __ ............__..... _ .. 359// - ._....._ - ..._........... _......._ I` - 30% i 25% — — 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses &Buyback) -% OptionIVG1 -% -- Conc is 25 -3 Option IVG1: Change Existing Plan Normal Form to Life Annuity, Vested EE's Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVGl -$ Option IVGl -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 34,863,363 72.94% 575,701 575,701 2011 37,226,360 75.25% 36,606,489 73.99% 619,871. 572,894 2012 37,981,309 74.18% 37,299,544 72.84% 681,765. 582,345 2013 38,660,638 72.95% 37,900,660 71.52% 759,978 599,956 2014 40,013,760 72.95% 39,170,996 71.41% 842,764 61.4,890 2015 41,414,242 72.95% 40,489,808 71.32% 924,434 623,361 2016 42,863,740 72.95% 41,858,141 71.24% 1,005,599 626,702 2017 44,363,971 72.95% 43,275,062 71.16% 1,088,909 627,192 2018 45,916,710 72.95% 44,733,653 71.07 0 /0 1,183,057 629,778 2019 47,523,795 72.95% 46,226,224 70.96% 1,297,571 638,390 2020 49,187,128 72.95% 47,766,506 70.84% 1,420,622 645,960 2021 50,908,677 72.95% 49,362,756 70.73% 1,545,922 649,662 2022 52,690,481 72.95% 51,023,326 70.64% 1,667,155 647,513 2023 54,534,648 72.95% 52,752,002 70.56% 1,782,646 639,898 2024 56,443,360 72.95 %° 54,545,831 70.50% 1,897,530 629,516 2025 55,418,878 72.95% 56,398,036 70.43% 2,020,842 619,617 2026 60,463,539 72.95% 58,323,328 70.37% 2,140,210 606,485 2027 62,579,763 72.95% 60,326,781 70.32% 2,252,982 590,057 2028 64,770,054 72.95% 62,410,234 70.29 %_ 2,359,821 571,200 2029 67,037,006 72.95% 64,563,975 70.26% 2,473,031 553,237 2030 69,383,301 72.95% 66,795,418 70.23% 2,587,883 535,056 2031 69,868,207 70.98% 67,162,842 68.23% 2,705,365 516,956 2032 70,122,087 68.82 0/0 67,294,670 66.05% 2,827,418 499,333 2033 66,721,958 63.27% 63,776,689 60.48% 2,945,270 480,726 2034 62,987,707 57.71% 59,924,243 54.90% 3,063,465 462,124 2035 65,472,079 57.96% 62,296,215 55.15% 3,175,864 442,772 2036 65,058,318 55.65% 61,769,123 52.83% 3,289,195 423,819 2037 63,213,581 52.24% 59,808,351 49.42% 3,405,230 405,518 2038 58,980,901 47.09% 55,456,489 44.28% 3,524,413 387,903 2039 45,863,374 35.38% 42,215,607 32.57% 3,647,767 371,053 2040 42,349,557 31.57% 38,868,451 28.97% 3,481,106 327,265 Total APV 17,096,883 ts 26 -1 Section 26 Option IVG2: Change Existing Plan Normal Form to Life Annuity, EE's Eligible for NR Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVG2: Change Existing Plan Normal Form to Life Annuity, EE's Eligible for NR 75,000,000 Grandfathered 70,000,000 65,000,000 60,000,000 -- 55,000,000 - -- 50,000,000 45,000,000 -- ___..m __ _. _ __ ------ - _._..._ ......... _. _.....__...___..__._...____._ ............ . _. __..___ _ ... ............ ... ... _...._: -- - .... ._ .._._.. 40,000,000 _.. ._.._ ............... _.....__.._. .. - -- ........... _ .... ... _._.... ....... _ ..... ___.._ ........ ..... _ ------- ............ _ ....... _ ....... ... -.---.--.......... _ ..... _....._ .._..._..... ................ - -- _..._____.. .._._.. .._....__..__.__.__...._.__..._ 35,000,000 - — -- 30,000,000 - - 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 - Current Plan Cost (incl. expenses &Bu)7back) -$ Option IVG2 -$ Concoots 26-2 Miami Beach Police &- Fire Plan Projected Cost in Percentages Option rVG2: Change Existing Plan Normal Form to Life Annuity, EE's Eligible for NR 80% -- -- ------ --- - - - - -- . ...... ............ ... .. - 75% .... . . - ----- ------ . . . . ...... - ------ . ... ... . ........ ------- ----------- .. . . ............. 70% 65% . . ...... ...... . .... - - -------- - . . . . . .. . . .............. ... ... 60% V, 55% 50 0 //0 Si 45% 40% X'A 35% .... . . .. ... .. ... .. ... . .. ... . . . . .. .. ..... . ..... . . . ...... .. ...... .. ...... ..... .. . 30% 25% . ............ - - - -- ----- ----------------------- ------- - - - - ----------------- - --- . .. . . .... ........ ..... .. . . . . .. .......... . ... . ........ . ... . ... . . . ... . ............................... 20% 10 11 12 13 14 15.16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 3 3 2 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buybadk)-% OptionrVG2-% conceots 26 -3 Option IVG2: Change Existing Plan Normal Form to Life Annuity; EE's Eligible for NR Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses ,& Annual of Savings Year Buyback) -$ Buyback) -% Option IVG2 -$ Option IVG2 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 33,746,253 70.60% 1,692,810 1,692,810 2011. 37,226,360 75.25% 35,467,274 71.69% 1,759,086 1,625,773 2012 37,981,309 74.18% 36,150,496 70.60% 1,830,813 1,563,830 2013 38,660,638 72.95% 36,755,633 69.35% 1,905,005 1,503,884 2014 40,013,760 72.95% 38,033,831 69.34% 1,979,929 1,444,577 2015 41,414,242 72.95% 39,358,845 69.33% 2,055,397 1,385,988 2016 42,863,740 72.95% 40,731,111 69.32% 2,132,630 1,329,082 2017 44,363,971 72.95% 42,151,708 69.31% 2,212,263 1,274,225 2018 45,916,710 72.95% 43,621,493 69.30% 2,295,217 1;221,815 2019 47,523,795 72.95% 45,140,895 69.29% 2,382,900 1,172,359 2020 49,187,128 72.95% 46,713,008 69.28% 2,474,119 1,124,988 2021 50,908,677 72.95% 48,340,232 69.27% 2,568,445 1,079,370 2022 ' 52,690,481 72.95% 50,025,079 69.26% 2,665,402 1,035,227 2023 54,534,648 72.95% 51,769,744 69.25% 2,764,903 992,489 2024 56,443,360 72.95% 53,574,699 69.24% 2,868,662 951,695 2025 58,418,878 72.95% 55,442,050 69.23% 2,976,828 912,735 2026 60,463,539 72.95% 57,375,522 69.22% 3,088,017 875,071 2027 62,579,763 72.95% 59,376,500 69.22% 3,203,263 838,937 2028 64,770,054 72.95% 61,446,663 69.21% 3,323,391 804,435 2029 67,037,006 72.95% 63,588,209 69.20% 3,448,797 771,525 2030 ' 69,383,301 72.95% 65,805,397 69.19% 3,577,904 739,747 2031 69,868,207 70.98% 66,157,091 67.21% 3,711,117 709,140 2032 70,122,087 68.82% 66,272,959 65.05% 3,849,128 679,771 2033 66,721,958 63.27% 62,732,503 59.49% 3,989,455 651,158 2034 62,987,707 57.71% 58,854,136 53.92% 4,133,571 623,550 2035 65,472,079 57.96% 61,192,296 54.17% 4,279,783 596,678 2036 65,058,318 55.65% 60,628,097 51.86% 4,430,221 570,843 2037 63,213,581 52.24% 58,628,031 48.45% 4,585,550 546,079 2038 58,980,901 47.09% 54,234,857 43.30% 4,746,044 522,358 2039 45,863,374 35.38% 40,951,219 31.59% 4,912,156 499,668 2040 42,349,557 31.57% 38,868,451 28.97% 3,481,106 327,265 Total APV 30,067,071 27 -1 Section 27 Option IVH1: Increase Existing Employee Contributions by 2 %, Vested EE's Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVH1: Increase Existing Employee Contributions by 2 %, Vested EE's Grandfathered 75,000,000 _......._.._ .................. .........................................._...._....._...._._............_...........__...................................................__......_............._.......................... ......._._...._.._..........:.. 70,000,000 - ..... .... .... :...._........;. 65,060,000 55,000,000 __....._....._ ........................._......... ... .. ............ .... .... ...... ..... -,._..........._...___._........._.... ._.........._...._..........._. _. _. _. 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 _....._.__......._.._.._......_ _...:._......_..._._.._.......- -.. ..._..._...._..._....._........ _ ... -----. .................. _ ......... ....... ..._...._....___...._.......................__...__...__......__.......:.__...._._..__._.._._.... ....__- .....__._........._..... - ....._.._...__....__..... 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl: expenses & Buyback) -$ Option IVH1 -$ - - - - C®nc ' is 27 -2 Miami Beach Police 6: Fire Plan Projected Cost in Percentages Option lVH1: Increase Existing Employee Contributions by 2 %, Vested EE's Grandfathered 80% - 75% 700% L ..__. _ _ _.._ _._ ____ _ ____ __________ ______._ _._. � � ��. 65% 60% . h 45% 40% ..._.._ .............. . ...:.......... _..._........_........_. ...... ..... _ ....... ....._............._:......_ .... _ ........ .............__.._ ....... ...._.... ........ ....... .. ........ .._._' _.... :..._._ 35% _.__..__......._._._.___.._....__..._......_._._--- __.___.___..._._......_._..__.__......._.....__._....__..____._._ ._._._...._._..._.._.____...._. _.___._____..._..._.._..........__..._....___....._...._..__,......__._..._. _...__..._..._...._._.._..._.__ g ._ ....... . 30% 25% �— 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback)% - OptionIVH1% A M - - - - Conc 0 ES 27 -3 Option IVH1: Increase Existing Employee Contributions by 2 %, Vested EE's Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option IVH1 -$ Option IVH1 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 35,085,376 73.40% 353,688 353,688 2011 37,226,360 75.25% 36,843,702 74.47% 382,659 353,659 2012 37,981,309 74.18% 37,556,886 73.35% 424,423 362,531 2013 38,660,638 72.95% 38,182,354 72.05% 478,284 377,575 2014 40,013,760 72.95% 39,478,383 71.97% 535,377 390,616 2015 41,414,242 72.95% 40,822,628 71.91% 591,613 398,935 2016 42,863,740 72.95% 42,216,298 71.85% 647,442 403,494 2017 44,363,971 72.95% 43,659,049 71.79% 704,923 406,023 2018 45,916,710 72.95% 45,146,556 71.73% 770,154 409,977 2019 47,523,795 72.95% 46,673,356 71.64% 850,439 ; 418,406 2020 49,187,128 72.95% 48,250,106 71.56% 937,021 426,066 2021 50,908,677 72.95% 49,883,289 71.48% 1,025;389 430,912 2022 52,690,481 72.95% 51,579,394 71.41% 1,111,086 431,540 2023 54,534,648 72.95% 53,341,885 71.35% 1,192,763 428,154 2024 56,443,360 72.95% 55,167,146 71.30% 1,276,215 423,392 2025 58,418,878 72.95% 57,052,342 71.24% 1,366,537 418,998 2026 60,463,539 72.95% 59,009,447 71.20% 1,454,092 412,055 2027 62,579,763 72.95% 61,040,673 71.16% 1,539,090 403,089 2028 64,770,054 72.95% 63,146,857" 71.12% 1,623,197 392,899 2029 67,037,006 72.95% 65,323,323 71.08% 1,713,684 383,365 2030 69,383,301 72.95% 67,578,516 71.05% 1,804,785 373,147 2031 69,868,207 70.98% 67,970,661 69.05% 1,897,546 362,593 2032 70,122,087 68.82% 68,128,029 66.87% 1,994,058 352,158 2033 66,721,958 63.27% 64,637,329 61.30% 2,084,630 340,253 2034 62,987,707 57.71% 60,813,496 55.72% 2,174,212 327,980 2035 65,472,079 57.96% 63,216,075 55.96% 2,256,004 314,527 2036 65,058,318 55.65% 62,720,961 53.65% 2,337,357 301,173 2037 63,213,581 52.24% 60,793,412 50.24% 2,420,169 288,210 2038 58,980,901 47.09% 56,476,026 45.09% 2,504,875 275,691 2039 45,863,374 35.38% 43,270,829 33.38% 2,592,546 263,716 2040 42,349,557 31.57% 39,666,273 29.57% 2,683,285 252,260 Total APV 11,477,082 28 -1 Section 28 Option IVH2: Increase Existing Employee Contributions by 2 %, EE's Eligible for NR Grandfathered Miami Beach Police & Fire Plan Projected Cost in Dollars Option IVH2: Increase Existing Employee Contributions by 2 %; EE's Eligible for NR 75,000,000 - Grandfathered 70,000,000 65,000,000 60,000,000 ' 55,000,000 50,000,000 45,000,000 _.._---- ...._:_.._..____._.__ _. --------- _ . _._ ........ _____............. _ - .- ............... _..._._ ... ...... __..._ _ ..... .... _.__ ......... _ _..__ _ ......... __..___ __ 40,000,000 _..._._--- .._.:_.._ :................... . . ....... __'_...____..._....... __ ......... ......... ..._..--- .__...... . ....... __ ..... ..._.._.__.._.._ .......... ..___.__.__....._......___.,___._._.._....---_.------_._ .......... ... ..._.._.._ ..._..._.._. ...... _..__ ". 35,000,000 30,000,000 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 - Current Plan Cost (incl. expenses & Buyback) -$ Option IVH2 -$ 28-2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option IVH2: Increase Existing Employee Contributions by 2%, EE's Eligible for NR 80% Grandfathered 75% 70% 65% 55% 50% 45% 40% 35% 30% 25% 20% lU ll 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (ind. expenses & Buyback)-% ­�i— OptionIVH2-% Conc 28 -3 Option IVH2: . Increase Existing Employee Contributions by 2 %, EE's Eligible for NR Grandfathered Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback), % Option IVH2 -$ Option IVH2 -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 34,597,069 7238% 841;994 841,994 2011 37,226,360 75.25% 36,343,498 73.46% 882,862 815,953 2012 37,981,309 74.18% 37,051,952 72.36% 929,357 793,831 2013 38,660,638 72.95% 37,685,072 71.11% 975,565 770,149 2014 40,013,760 72.95% 38,994,181 71.09% 1,019,579 743,895 2015 41,414,242 72.95% 40,352,707 71.08% 1,061,535 715,810 2016 42,863,740 72.95% 41,760,135 71.07% 1,103,605 687,781 2017 44,363,971 72.95% 43,217,458 71.06% 1,146,51.3 660,371 2018 45,916,710 72.95% 44,725,644 71.06% 1,191,066 634,042 2019 47,523,795 72.95% 46,285,257 71.05 0 /(3 1,238,538 609,346 2020 49,187,128 72.95% 47,899,194 71.04% 1,287,933 585,627 2021 50,908,677 72.95% 49,569,713 71.03% 1,338,964 562,690 2022 52,690,481 72.95% 51,299,280 71.02% 1,391,201 540,334 2023 54,534,648 72.95% 53,090,042 71.02% 1,444,605 518,555 2024 56,443;360 72.95% 54,942,933 71.01% 1,500,427 497,775 2025 58,418,878 7195% 56,860,154 71.00% 1,558,724 477,926 2026 60,463,539 72.95% 58,845,065 71.0Q% 1,618,474 458,637 2027 62,579,763 72.95% 60,899,324 70.99% 1,680,438 440,108 2028 64,770,054 72.95 0 /o 63,024,853 70.98% 1,745,201 422,430 2029 67,037,006 72.95% 65,223,979 70.98% 1,813,027 405,589 2030 69,383,301 72.95% 67,500,586 70.97% 1,882,716 389,260 2031 69,868,207 70.98% 67,913,670 68.99% 1,954,538 373,484 2032 70,122,087' 68.82% 68,093,113 6 6.83% 2,028,974 358,325 2033 66,721,958 63.27% 64,617;809, 61.28% 2,104,149 343,439 2034. 62,987,707 57.71 0/0 60,806,584 55.71 % 2,181,123 329,023 2035 65,472,079 57.96% 63;213,476 55.96% 2,258,603 314,890 2036 65,058,318 55.65% 62,720,185 53.65% 2,338,133 301,273' 2037 63,213,581 52.24% 60,793,412 50.24% 2,420,169 288,210 2038 58,980,901 47.09 56,476,026 45.09% 2,504,875. 275,691 2039 45,863,374 35.38% 43,270,829 33.38% 2,592,546 263,716 2040 42,349,557 31.57% 39,666,273 29.57 0 0 2,683,285 252,260 Total APV 15,672,414 29-1 Section 29 Option V: Chapter Minimum-Freeze Current Plan Benefits, Implement Chapter Minimum Benefits Plan for all Future Service, Grandfather all Employees Eligible for NR Miami Beach Police L Fire Plan Projected Cost in Dollars Option V: Chapter Minimum-Freeze Current Plan Benefits, Implement Chapter Minimum Benefits Plan for all Future Service, Grandfather all Employees Eligible for NR 75,000,000 70,000,000 . ................... . .... . . ..... 0 65,000,000 60,000,000 55,000,000 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 --------------------- - -- - ------- . ....... .......... .. . ..... . .. . .... ....... ............. . . ..... 10,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 3334 35 36 37 38 39 40 —Current Plan Cost (incl. expenses & Buyback)-$ Option Chapter Minimum Benefits-$ Conc e* P A L S R 29 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option V: Chapter Minimum - Freeze Current Plan Benefits, Implement Chapter Minimum Benefits Plan for all Future Service, Grandfather all Employees Eligible for NR 75% - 70% - -55% ._.. ......_.._......._:__.._....... ...__......_......._._..__ ....................___._.................. ... -__ ...... _ ------ ..__._..._.._...__............... __.....:. ........... ...._...---- ....._........... .._.__.._.......... ......... .:..__ ....... _ .._ ....... _ ........ .._._._..... .......... - .._............_.... 50% 45% ______..._____ 40% 35% 25% 20% 15% 10% 5% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost fincl. expenses & Buyback) -% Option Chapter Minimum Benefits -% - - - - C®ncg 29 -3 Option V: Chapter Minimum- Freeze Current Plan Benefits, Implement Chapter Minimum Benefits Plan for all Future Service, Grandfather all Employees Eligible for NR Current Plan Cost Current Plan Cost Option Chapter Option Chapter Present Value (incl. expenses & (incl. expenses & Minimum Benefits- Minimum Benefits- Annual of Savings Year Buyback) -$ Buyback) -% $ % Savings (Cost) (Cost) 2010 35,439,063 74.14% 24,259,101 50.75% 11,179,963 11,179,963 2011 37,226,360 75.25% 25,337,626 51.69% 11,888,734 10,987,739 2012 37,981,309 74.18% 25,346,200 50.05% 12,635,109 10,792,560 2013 38,660,638 72.95% 25,487,439 47.65 13,173,199 10,399,428 2014 40,013,760 72.95% 26,456,302 46.36% 13,557,458 9,891,661 2015 41,414,242 72.95% 27,578,105 45.18% 13,836,137 9,329,933 2016 42,863,740 72.95% 28,769,052 44.15% 14,094,688 8,783,991 2017 44,363,971 72.95% 30,032,923 43.18% 14,331,048 8,254,431 2018 45,916,710 72.95% 31,407,521 42.15% 14,509,189 7,723,694 2019 47,523,795 72.95% 32,950,145 40.91% 14,573,650 7,170,063 2020 49,187,128 72.95% 34,587,965 39.72% 14,599,163 6;638,277 2021 50,908,677 72.95% 36,281,112 38.67% 14,627,565 6,147,127 2022 52,690,481 72.95% 37,999,766 37.81% 14,690,715 5,705,790 2023 54,534,648 72.95% 39,726,301 37.12% 14,808,347 5,315,599 2024 56,443,360 72.95% 41,567,659 36.40% 14,875,701 4,935,098 2025 58,418,878 72.95% 43,531,437 35.68% 14,887,441 4,564,688 2026 60,463,539 72.95% 45,51.6,209 35.08% 14,947,330 4,235,722 2027 62,579,763 72.95% 47,581,427 34.52% 14,998,335 3,928,074 2028 64,770,054 '72.95% 49,774,818 33.95% 14,995,236 3,629,632 2029 67,037,006 72.95% 52,115,704 33.36% 14,921,303 3,338,019 2030 69,383,301 72.95% 54,493,144 32.85% 14,890,157 3,078,606 2031 69,868,207 70.98% 54,983,090 31.31% 14,885,117 2,844,329 2032 70,122,087 68.82% 55,251,157 29.74% 14,870,931 2,626,264 2033 66,721,958 63.27% 51,700,023 26.50% 15,021,935 2,451,878 2034 62,987,707 57.71% 47,735,519 23.39% 15,252,188 2,300,795 2035 65,472,079 57.96% 49,787,333 23.48% 15,684,746 2,186,734 2036 65,058,318 55.65% 48,867,152 22.24% 16,191,166 2,086,264 2037 63,213,581 52.24% 46,473,580 20.42% 16,740,001 1,993,515 2038 58,980,901 47.09% 41,655,001. 17.68% 17,325,901 1,906,920 2039 45,863,374 35.38% 27,931,067 11.46% 17,932,307 1,824,087 2040 42,349,557 31.57% 30,858,185 12.23% 11,491,373 1,080,324 Total APV 167,331,205 30 -1 Section 30 Option VI: Reformed Plan for New Employees: Minimum Retirement Age 48, 4% multiplier after 20 years, 3 year FAME, 1.5% Retiree COLA. Miami Beach Police 8, Fire Plan Projected Cost in Dollars Option \>I: Reformed Plan for New Employees: Minimum Retirement Age 48, 4% multiplier 85,000,000 after 20 years, 3 year FAME, 1.5% Retiree COLA 80,000,000 _...._..__._.. ........ .... ---- --.._. --- ..................... ... _-._._._.__ ...... _ ........ - ..... ...... ............ ._._ ........... _ ... _ ..... _ .................... _......._---......... ............ .............. ._. .... _ .... ......... ....._.._. ..... ...... ................... - ---- ..._._._:.. - - ._.._._._.. ......... ... 75,000,000 .... ........ ... ...._ ......................._.. _._..... .... ... :......................................._...._...._....._................. ........ ........._..............................._................_...._.._._....._....._..._..._._._..._....................................._.................._....... ........._................._... ._:.................__..............._._.... .......__..._.................. .70,000,000 65,000,000 60,000,000 , 55,000,000 — - -- 50,000,000 - -- — — — - -� -- 45,000,000 ._ _ ........ .....- ........ ...__.... .. ......_ ......... ...... ............. ........................... ................. _............. ......... . 40,000,000 .......... ...... ........ .....__..:...._.._.....__.......__._._..._.._....._......__ .................._......._..........._........._._._.._.... ._._.._......- __....._._....... ....._.._.._.._........_....._...._...._.._..._........_..._....._..__............_,.........._.........._...._..................._.. .---- ............_.__..._. - -.._ ....__........_.._...._ 35, 000, 000 _... 30,000,000 25,000,000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback) -$ Option VI-$ 30 -2 Miami Beach Police & Fire Plan Projected Cost in Percentages Option VI: Reformed Plan for New Employees: Minimum Retirement Age 48, 4% multiplier after 20 years, 3 year FAME, 1.5 °. Retiree COLA 85% 80% 75% 65% r� 60% _ - 55% m 45 ° ro 40% ......................... ______......_....._....--..._.__.__......_.._........._-_--__......_..........._.__...._.._.....__..__.._.._.-......_..___._..__......_..___.......___._....__.........._.__...._..__..__.__.__._____.. _- ___._.._...._...._._........; ..._... % __._._...... 35% - 30% .._ .. ...... .........._....._...._....._........_._.._........_..._...._._....._........__...... ..... _. ............. .._._.__........_...........__-. ............. _ ...._._....._.._............... _ . .... ........... ............_........ .......... ..... ....._._........................... ... ...... .... _.:_.._._..._ ............._._._...._........ ...._........ .:........_.._...._............ .._............. ....._.._.....................- .............. ........__....._.._....... ...._....- .._._......_. ...._.......................... ...... 20% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Current Plan Cost (incl. expenses & Buyback)% Option VI -% Conc 30 -3 Option VI: Reformed Plan for New Employees: Minimum Retirement Age 48, 4% multiplier after 20 years, 3 year FAME, 1.5% Retiree COLA Current Plan Cost Current Plan Cost Present Value (incl. expenses & (incl. expenses & Annual of Savings Year Buyback) -$ Buyback) -% Option VI -$ Option VI -% Savings (Cost) (Cost) 2010 35,439,063 74.14% 35,439,063 74.14% - - 2011 37,226,360 75.25% 37,148,265 75.09% 78,096 72,177 2012 37,981 74.18% 37,755,762 73.74% 225,547 192,656 201.3 38,660,638 72.95% 38,216,584 72.11% 444,054 350,553 2014 40,013;760 72.95% 39,335,749 71.71% 678,011 494,684 2015 41,414,242 72.95% 40,509,026 71.35% 905,216 610,402 2016 42,863,740 72.95% 41,735,540 71.03% 1,128,200 703,109 2017, 44,363,971 72.95% 43,003,118 70.71% 1,360,853 783,827 2018 45,916,710 72.95% 44,283,119 70.35% 1,633,591 869,611 2019 47,523,795 72.95% 45,529,738 69.89% 1,994,056 981,052 2020 49,1.87,128 72.95% 46,796,935 69.40% 2,390,193 1,086,827 2021 50,908,677 72.95% 48,111,117 68.94% 2,797,560 1,175,654 2022 52,690,481 72.95% 49,497,011 68.53% 3,193,470 1,240,325 2023 54,534,648 72.95% 50,966,754 68.18% 3,567,893 1,280,730 2024 56,443,360 72.95% 52,453,757 67.79% 3,989,603 1,323,573 2025 58,418,878 72.9500 53,957,533 67.38% 4,461,345 1,367,908 2026 60,463,539 72.95% 55,545,950 67.02% 4,917,588 1,393,529 2027 62,579,763 72.95% 57,182,817 66.66% 5,396,945 1,413,463 2028 64,770,054 72.95% 58,840,606 66.27% 5,929,448 1,435,237 2029 67,037,006 72.95% 60,510,394 65.85% 6,526,612 1,460,057 2030 69,383,301 7195% 62,268,152 65.47% 7,115,149 1,471,088 2031 69,868,207 70.98% 62,161,619 63.15% 7,706,589 1,472,617 2032 70,122,087 68.82% 61,797,521 60.65% 8,324,566 1,470,151 2033 66,721,958 63.27% 57,865,604 54.87% 8,856,354 1,445,533 2034 62,987,707 57.71% 53,629,082 49.14% 9,358,626 1,411,750 2035 65,472,079 57.96% 55,720,003 49.33% 9,752,076 1,359,614 2036 65,058,318 55.65% 54,937,233 46.99% 10,121,085 1,304,122 2037 63,213,581 52.24% 52,726,639 43.57% 10,486,942 1,248,857 2038 58,980,901 47.09% 48,126,916 38.43% 10,853,985 1,194,609 2039 45,863,374 35.38% 34,629,500 26.71% 11,233,874 1,142,718 2040 42,349,557 31.57% 30,722,497 22.90% 11,627,060 1,093,080 Total APV 32,849,516 Survey of Comparative Jurisdictions y 2 ° m i N a) y ° s U I O t i� [[ (D t0 )O O) a Q O O o 0 V) y 000 m a) N N (D (D z z )f) LO Z z Z n aJ a) p �- M M i^ i4 m FY' C U Y 1` O N`% N oo o _ „ O O O Ni m � ¢ ai Q o �' o < Q o 0 op;� 5 Q z z z 'z z z z L - 7 i m o Dj M aD (D N rn II • h II ) II L6 II N a) ; i U II U II U II I II '- m .o m Q o d Q o Q o m Q o d O Q 4 Q Q m LL, p ;} .Z a E z .n. 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S II E "" m e E c LL `` *: Z > z Q O O a W Supporting Rationale and Data for Proposed Guidelines and Policy Statements City of Miami Beach Budget Advisory Committee Pension Reform: Policy and Guideline Statements AFFORDABILITY AND SUSTAINABILITY GUIDELINE STATEMENT: If the City's portion of the total annual cost of retirement benefits contribution exceeds 25 percent of payroll for general employees and 60 percent of payroll for high risk employees, the City should review and evaluate potential changes to the collective bargaining agreements between the City and the Unions, applicable towards the next contract negotiations, in order to identify potential approaches to reduce the contributions to these levels over the long term. POLICY STATEMENT: • The City shall fund at least the normal cost of pension. If this exceeds the amount of the actuarially determined annual required contribution, the excess should be placed in a pension stabilization fund, to be made available for future pension shortfalls. Background /Rationale: Pension plans require annual contributions from plan sponsors (i.e., municipal governments) and participants in order to maintain their funding levels. Ideally, those contributions are only necessary to pay for future benefits that were earned by participants in the current year. That amount is referred to as the normal contribution. Normal contributions increase as plans provide more generous benefits, make benefits available to more individuals and reduce the number of years someone needs to work or lower the age when the plan will begin to pay benefits. Underfunded pension plans require an additional contribution in order to eventually eliminate their unfunded liabilities. When pension plans are underfunded, annual contributions need to include the normal contribution and an additional contribution to pay down the unfunded portion of the liability. Therefore, if two pension plans have equal benefit policies and equal employee characteristics but one is 75 percent funded and the other is 100 percent funded, the plan that is 75 percent funded will require a larger annual contribution in order to pay down its unfunded liability. Plan sponsors do not have to make up the entire unfunded portion of the liability in a single year. In most cases, that amount would be too costly for governments to pay in full. Instead, a professional actuary establishes a payment schedule that allows the sponsor to pay off the unfunded portion of the liability over as many as 30 years. In short, plans with large unfunded liabilities will pay more in annual pension costs. The combination of the normal cost funding requirement and the payment for amortization of the unfunded liability results in a combined annual required contribution (ARC) that the City is required to pay to each pension plan for the next fiscal year. Typically, this is expressed as a percent of the payroll applicable to the particular pension plan to allow comparability from year to year, as well as, to other pension plans. 1 City of Miami Beach Budget Advisory Committee Pension Reform Policy and Guideline Statements Current Conditions: The City of Miami Beach pension contributions as a percent of payroll as of the 10/1/10 valuation reports: Fire and Police Pension Plan: 72.76 %% Miami Beach Employees Retirement Plan: 25.02% Fire and Police Pension Plan Normal Cost: 32.59 %% Miami Beach Employees Retirement Plan Normal Cost: 10.80% At this: time, the negotiated changes to the Fire and Police Pension Plan are under litigation. However, the projections provided by the Fire and Police Pension Plan actuary regarding the impact of changes collectively bargained for new employees were minimal. In addition, assuming all actuarial projections were met from FY 2010/11 forward, the ARC as a percent of payroll is projected to increase to 81.05% by Fiscal Year 2017 contribution. The Miami Beach Employees Retirement Plan (MBERP).Actuary projected that the 2010 changes to the plan for new employees would decrease the unfunded liability payment by approximately $6 million - 5.78% of payroll after 10 years. Even with this decrease, and assuming all actuarial projections were met from FY 2010/11 forward, the ARC as a percent of payroll is projected to increase to 37.1.2% by Fiscal Year 2017, declining each year thereafter. Comparison to Florida Retirement System and Comparative Local Jurisdictions: Total annual em to er cost of retirement benefits contribution as a percent of payroll Jurisdiction High Risk Employees General Employees Boca Raton 52.72% 19.81% Coral Gables 49.1 % Coral Springs Police: 87.98 % Fire 28.02 % Fort Lauderdale 49% 32.75% Plan closed for new hires 10/1/2007- 3/5/2008 Now defined contribution Hialeah 32.59% Hollywood Police: 84.41% 36.14% Fire 127.03% (Plans. are now frozen for (Plans are now frozen and new General Fund Employees and plans with lower benefits new plans with lower benefits became effective 10/1/11 ) became effective 10/1/11 2 City of Miami Beach Budget Advisory Committee Pension Reform: Policy and Guideline. Statements North Miami 30.21% 32.14% North Miami Beach 55.3% 25% Pom ano 38.59 % 21.39% Tamarac 55.45% 28.8% FRS 14.1% 7/1/11 4.91% 7/1/11 (Includes Coconut Creek, 19.56% 7/1/12 .6.58% 7/1/12 Cooper City, Miami Gardens, Miami -Dade County, Miami Lakes, Pinecrest and Wilton Manors) 3 City of Miami Beach Budget Advisory Committee Pension Reform: Policy and Guideline Statements POLICY STATEMENT: The City should strive to maintain a funded ratio of at least 80 percent for each of its defined benefit pension plans.. GUIDELINE STATEMENT(S): • If the funded ratio (actuarial value of assets minus actuarial liabilities) of either of the City of Miami Beach's pension plans falls below 70 percent, the City should strive to implement approaches to increase the funded ratio to that level over five (5) years. Background /Rationale: Each year, the City receives independent actuarial reports for each of the City's two pension plans. The actuarial valuation of the pension plan is a mathematical determination of the financial condition of the plan, which includes: the computation of the present monetary value of benefits payable to present members, the present monetary value of future employer and employee contributions, considering-the expected mortality rates among employees and retirees, rates of disability, retirement age, withdrawal from service, salary increases, investment earnings and value of assets. As part of the annual actuarial valuation for each plan based on plan data as of October 1, the Actuary evaluates how the actual data for the preceding year compared to the actuarial valuation for that year. Any differences are reflected as gains or losses in unfunded liability. The unfunded liability for a plan is the difference between the benefits earned (accrued) and the assets of the plan on a' given date, and is typically amortized and funded over 30 years. The amortization methodology varies by plan.. In the Fire and Police Pension Plan, the amortization is based on increased payments in proportion to assumed future payroll growth. In the MBERP, an assumption of level amortization payments is used. The unfunded liability of the plan is the actuarial accrued liability less the plan actuarial assets. This amount is expected to have year -by -year fluctuations; however, if the plan's assumptions are consistent with the plans long -term experience, the changes in the unfunded liability should be offsetting over the life of the plan. In contrast to the market value of the pension plan assets, the actuarial value of the pension plan assets is equal to the market value of the assets at a specific data, adjusted to reflect a five -year phase -in (or smoothing) of any asset experience gain or loss. The five -year smoothing of pension plan . asset value means that only 20 percent of the experience gain or loss that the fund experiences in any one year is recognized immediately for the purpose of determining the actuarial value of the plan and the annual required contribution. The percent of the actuarial accrued liability funded is a measure of a pension fund's fiscal health. It compares assets to pension obligations. A percentage over 100% means that the fund has more money than it needs to meet its obligations at that point in time. 4 . . -City of Beach Budget Advisory Committee Pension Reform: Policy and. Guideline Statements Current Conditions: City of Miami Beach funding levels as of the 10/1/10 valuation reports: Fire and Police Pension Plan: 64.3% Miami Beach Employees Retirement Plan: 74.4% Comparison to Florida Retirement System and Comparative Local Jurisdictiohs: Funded Ratio Jurisdiction High Risk Employees General Employees Boca Raton 70.26% 91.38% Coral Gables 57.5% Coral Springs Police 77.77% Fire: 79.65% Fort Lauderdale 77.4% 70.7% -Plan closed for new hires 10/l/2007-3/5/2008 Now defined contribution Hialeah 75.03% 75.03% Hollywood Police 53.5 %' 63.78 % Fire 37.6% (Plans are now frozen for (Plans are now frozen and new General Fund Employees and plans with lower benefits new plans with lower benefits became effective 10/1/11) became effective 10/1 /11) North Miami 68.6 % 75.6% North Miami Beach 61.6% 70.3% Pompano 69.8% 74.2% Tamarac 63.3 % 77.96% FRS (Includes Coconut Creek, 87.1 % Cooper City, Miami Gardens, (7/1/11) Miami -Dade County, Miami Lakes, Pinecrest and Wilton Manors Other Information: The United States Postal Service Office of the Inspector General (June 18, 2010) concluded that 80 percent prefunding of pensions is reasonable based on the following: The Standard and Poor's companies' (S &P 500) median prefunding level for pensions in 2009 was 79 percent of liabilities. From 2001 through 2009, S &P 500's pension median prefunding ranged from 73 to 112 percent. 5 City of Miami Beach Budget Advisory Committee Pension Reform: Policy and Guideline Statements The aggregate prefunding for states' pensions in 2008 was also 79 percent. From 2001 through 2009, state governments' aggregate pension prefunding ranged from 59 to 90 percent. The Government Accountability Office (GAO) reported that many experts consider at least 80 percent prefunding to be sound for government pensions. (Source: The GAO's State and Local Government Retiree Benefits Current Funded (5); The GAO's State and Local Government Retiree Benefits Current Funded Status of Pension and Health Benefits, January 2008.) The Pension Protection Act of 2006 considers pensions prefunded at less than 70 percent as being "at, risk" and attempts to protect such plans by commencing restrictions on corporate pension funds only when prefunding is below 80 percent, The 2011 report prepared by the Leroy Collins Institute at Florida State University for pension systems across Florida assigned the following grades to pension plans based on percent funded. GRADE PERCENTFUNDED A More than 90% funded B 80 to 90% funded C 70 to 80% funded D 60 to 70% funded F Less than 60% funded The following cities scored an "F" grade, according to the institute's study: Boynton Beach, Cooper City, Fort Myers, Hollywood, Homestead, Jacksonville, Miramar, Oakland Park, Ocala, Oviedo, Palm Beach Gardens, Panama City, Parkland, Plant City, Port Orange, Tamarac, Temple Terrace, Venice and Winter Haven. The highest rated was Melbourne's general employee plan with 190.1 percent funding, while Cooper City's general employee and police pension fund sat at the bottom with 35.48 percent funding. Pension funds that exceeded the 100% funded mark -- Tallahassee's general, Clearwater's firefighters, Gainesville's general, Key West's general, Palm Coast's firefighters, Plantation's firefighters and Rockledge's general and police funds - have more than enough money in the bank to cover projected payouts to former and current employees. The federal government has funded its combined Civil Service Retirement System (CSRS) and Federal Employee Retirement System (FERS) pension obligations at only 41 percent of liabilities and the military's prefunding for pensions is only 24 percent (Source: US Postal Service Office of The Inspector General Report of Pension Funding, 2010). -6 City of Miami Beach Budget Advisory Committee Pension Reform: Policy and Guideline Statements POLICY STATEMENT(S): Salary growth should not exceed the average actuarially assumed salary growth in each pension plan. Background /Rationale: Each year, the City receives independent actuarial reports for each of the City's two pension plans. The actuarial valuation of the pension plan is a mathematical determination of the financial condition of the plan, which includes: the computation of the present monetary value of benefits payable to present members, the present monetary value of future employer, and employee contributions, considering the expected mortality rates among employees and retirees, rates of disability, retirement age, withdrawal from service, salary increases, investment earnings and value of assets. Each year, experience "gains" in the prior year reduces the actuarial accrued liability. Experience "losses" for the prior year, conversely, increases the actuarial accrued liability. To the extent that salary growth is more than the actuarial assumption for the plan, this would result in an experience "loss" and add to the unfunded liability of the plan. Salary growth can result from merit increases, automatic step adjustments to salaries annually, cost of living adjustments impacting all employees or subsets or employees (COLA's), adjustments to salary ranges based on compensation studies, etc. Current Conditions: Projected salary rate.increases vary by age. For the Fire and Police Pension Plan, the average long -term assumption across all ages is 6 percent per year. For the Miami Beach Employees Retirement Plan, the assumed increases are as follows: Years of Service Merit and Seniority Base (Economic) Total Increase 1 .4.0% 4.0% 8.0% 2 3.9% 4.0% 7.9% 3 _ 3.8% 4.0% 7.8% 4 3.7% 4.0% 7.7% 5 3.6% 4.0% 7.6% 6 3.5% 4.0% 7.5% 7 3.0% 4.0% 7.0% 8 2.9% 4.0% 6.9% 9 2.8% 4.0% 6.8% 10 2.7% 4.0% 6.7% 11 2.6% 4.0% 6.6% 12 2.5% 4.0% 6.5% 13 2.4% 4.0% 6.4% 7 City of Miami Beach Budget Advisory Committee Pension Reform: Policy and Guideline Statements 14 2.3% 4.0% 6.3% 15 2.2% 4.0% 6.2% 16 2.1% 4.0% 6.1% 17 2.0% 4.0% 6.0% 18 1.9% 4.0% 5.9% 19 1.8% 4.0% 5.8% 20 1.7% 4.0% 5.7%. 21+ 1.5% 4.0% 5.5% The pension board for MBERP recently approved a decrease in the salary growth assumption for the 10/11/11 valuation to reflect the downturn in the economy and the lower economic increases in recent years and likely into the future. Comparison to Florida Retirement System and Comparative Local Jurisdictions: Not Applicable 8 City of Miami Beach Budget Advisory Committee Pension Reform: Policy and Guideline Statements POLICY STATEMENT(S): • The City should require 5, 10 and 20 year projections of required pension contributions as part of the annual actuarial valuations for each of the City's pension plans. These projections shall be based on the current actuarial assumptions for each plan. The projections shall be updated to reflect the cost of any proposed benefit enhancement, before the City Commission agrees to the enhancement. The cost of these studies shall be funded separately from the annual contribution to the pension plan. There shall be an experience study of each of the City's pension - plan's actuarial assumptions performed by an actuary that is independent from the pension board. The experience study should be conducted at least once every three (3) years, to compare actual experience to the assumptions. The independent actuary shall make recommendations for any changes in assumptions based on the results of the experience study, and any deviations from those assumptions by the pension board shall be justified to the City Commission. Once pension reform is implemented, a 5 /7 vote of the City Commission should be required for further pension changes. Background /Rationale: Changes to plan benefits can affect the actuarial accrued liability of a plan, either positively or negatively. If plan benefits are increased, the mathematical calculations will result in more benefits anticipated to be paid to plan members in the future, which will need to be recognized all at once, although payments would be amortized over the long -term. Conversely, if plan benefits are reduced, with all else being equal, the plan will see a reduction in the actuarial accrued liability. Current Conditions: Not Applicable Comparison to Florida Retirement System and Comparative Local Jurisdictions: Not Applicable 9 City.of Miami Beach Budget Advisory Committee Pension Reform: Policy and Guideline Statements APPROPRIATE BENEFITS TO PROVIDE TO EMPLOYEES DRAFT POLICY STATEMENT(S): • The City of Miami Beach should strive to provide a retirement benefit that provides for a replacement of salary at a level at least equivalent to Social Security plus a supplemental retirement benefit. Background /Rationale: In the United States, 96 percent of workers are covered by Social Security. The benefit payment is based on how much is earned during your working career. Higher lifetime earnings result in higher benefits. If there were some years when you did not work or had low earnings, your benefit amount may be lower than if you had worked steadily. Social Security replaces about 40 percent of preretirement income for the average worker. The average replacement rate for lower -paid workers equals about 55 percent of their pre- retirement earnings. The average replacement rate for highly paid workers is about 25 percent. Windfall Elimination Provision Before 1983, people who worked mainly in a job not covered by Social Security had their Social Security benefits calculated as if they were long -term, low -wage workers. They had the advantage of receiving a Social Security benefit representing a higher percentage of their earnings, plus a pension from a job where they did not pay Social Security taxes. Congress passed the Windfall Elimination Provision to remove that advantage. Government Pension Offset If you receive a pension from a federal, state or local government based on work where you did not pay Social Security taxes, your Social Security spouse's or widow's or widower's benefits may be reduced by two- thirds of your government pension. (Source: Social Security website: http: / /www.ssa.gov /pubs /10035.html hftp: / /www.ssa.gov /pubs /10045.html http: / /www.ssa.gov /pubs /10007.html Current Conditions: The City of Miami Beach currently does not participate in Social Security. In evaluating proposed changes to the City's pension plans, the fact that the City does not participate in Social Security must be taken into account. 10 City of Miami Beach Budget Advisory Committee Pension Reform: Policy and Guideline Statements Comparison to Florida Retirement System and Comparative Local Jurisdictions: Participation in Social Security Jurisdiction General Employees Boca Raton Yes Coral Gables Yes Coral Springs Yes Fort Lauderdale Yes Hialeah Yes Hollywood Yes North Miami Yes North Miami Beach Yes Pompano Yes Tamarac Yes FRS Yes (includes Miami Dade County, Miami Lakes, Pinecrest, Wilton Manors 11 City of Miami Beach Budget Advisory Committee Pension Reform: Policy and Guideline Statements POLICY STATEMENT(S): City of Miami Beach retirement benefits should be adjusted periodically after retirement to reflect the impacts of inflation, with rates no more than the Consumer Price Index for All Workers (CPI- W), subject to Commission approval, and with a maximum of 3 percent annually. Background /Rationale: Most people are aware that there are annual increases in Social Security benefits to offset the effects of inflation on fixed incomes. These increases, now known as cost -of- living adjustments (COLAs), are such an accepted feature of the program that it is difficult to imagine a time when there were no COLAs. Before 1975, beneficiaries had to await a special act of Congress to receive a benefit increase. Beginning in 1975, Social Security started automatic annual COLAs. The change was enacted by legislation that ties COLAs to the annual increase in the CPI -W. (Source: Social Security website: http: / /www.ssa,gov /pubs /10035.html http: / /www.ssa.gov /pubs /10045.html http: / /www.ssa.gov /pubs /10007.html Current Conditions: Fire and Police Pension Plan Employees hired before 10/1/10 2.5% Employees hired on or after 10/1/10 — 1.5% with first adjustment deferred to 1 year after the end of DROP or 2 mandatory 0 DROP COLAs* Miami Beach Employees Pension Plan Employees hired before 10/1/10 - 2.5% Employees hired on or after 10/1/10 — 1.5% *Subject to current litigation 12 . City of Miami Beach Budget Advisory Committee - Pension Reform: Policy and Guideline Statements Comparison to Florida Retirement System and Comparative Local Jurisdictions: Cost of Living Adjustments Jurisdiction High Risk Employees General. Employees Boca Raton Not required = reviewed every Not required — reviewed every odd year odd year Coral Gables If investment returns are over 10 %, then equal to half of CPI — catch-up clause capped at 8% Coral Springs 2.5% 1% commences 5 years after retirement or DROP ent Fort Lauderdale COLA provision repealed Very Infrequent — only if actual 7/15/2008 investment earnings exceed assumptions Plan closed for new hires 10/l/2007-3/5/2008 Now defined contribution Hialeah 2% for 10 years Hollywood Police: None Only , Enterprise employees Fire None hired prior to 7/15/2009 (Plans are now frozen and new (Plans are now frozen for plans with lower benefits General Fund Employees and became effective 10/1/11) new plans with lower benefits .became effective 10/1/11 North Miami 1.92% with 1 year elimination 1.92% with 1 year elimination period or 3% with 5 year period or 3% with 5 year elimination period elimination period North Miami Beach 2.5% Annually after 3 Years of 2.25% Annually Retirement Pompano 2% fixed Tier 1 2% 1 % variable Tier 2 5 year waiting period tiered 0 -2% based on age Tamarac Employees retiring before Up to 2% - solely funded from 3/1/07 = 2% after 3 years of actuarial gains retirement After 3/1/07 — 2.25 %. after 3 ears of retirement FRS (Includes Coconut Creek, 3% for benefits earned prior to 7/1/11 Cooper City, Miami Gardens, None for benefits earned thereafter Miami -Dade County, Miami Lakes, Pinecrest and Wilton Manors) 13 City of Miami Beach Budget Advisory Committee Pension. Reform: Policy and Guideline Statements w RECRUITMENT AND- RETENTION POLICY STATEMENT(S): The City of Miami Beach should strive to provide retirement benefits that ensure that the City is competitive in recruitment and retention of employees. Background /Rationale: Salary ranges for job classifications in City of Miami Beach are periodically reviewed to ensure internal equity and external competitiveness. Internal equity refers to the relationships (duties, level of responsibilities, salary, tenure, etc.) between positions within the same organization. External equity refers to the relationships (duties, level of responsibilities, salary, tenure, etc.) between positions to the external labor market, in both, the public and private sectors. Benefits, including pension, are also periodically reviewed. Current Conditions: In the past, particularly during periods of low unemployment rates when competition for employees has been tight, the City has targeted to set salaries in the 75 percentile of neighboring jurisdictions, and to provide benefits similar to neighboring jurisdictions. Comparison to Florida Retirement System (FRS) and Comparative Local Jurisdictions: See survey of pension benefits provided by neighboring jurisdictions In addition, the 2009 Classification and Compensation Study prepared by Condrey and Associates for the City of Miami Beach concluded that "the City's retirement benefit, while generous,. appears appropriate -considering the employee 8 percent contribution to the fund (based on a comparison to other jurisdictions locally and throughout Florida). 14 City of Miami Beach Budget Advisory Committee Pension Reform Policy Guideline Statements MANAGEMENT OF RISK/RISK SHARING POLICY STATEMENT(S): • The City of Miami Beach should strive to share some portion of retirement benefit risk with employees. GUIDELINE STATEMENT(S): • If the City's contribution to a defined pension benefit plan exceeds. 25 percent of payroll for general employees and 60 percent of payroll for high -risk employees, the employee contribution should be reviewed. Background /Rationale: With the City of Miami Beach's two pension plans, the City bears 100 percent of the risk of the volatility of the equity market; whereas, with private sector pension plans, the risk is born by the employee. Current Conditions: Fire and Police Pension Plan: Employee Contribution Rates - 10% Miami Beach Employees Retirement Plan Employee Contribution Rates for employees hired prior to early 1990's — 12% Employee Contribution Rates for employees hired after early 1990's — 10% Comparison to Florida Retirement System and Comparative Local Jurisdictions: Employee Contribution Rates Jurisdiction High Risk Employees General Employees Boca Raton 10.2% Plans A &B 9.65% Plan C 6% Coral Gables 5% 5 -10% Coral Springs Police 9.875% Fire 8.75% Fort Lauderdale Hired before 4 -18 -10 8.25% 6% Plan closed for new hires Hired after 4 -18 -10 8.5% 10/1/2007- 3/5/2008 Now defined contribution Hialeah 0% 15 City of Miami Beach Budget Advisory Committee Pension Reform: Policy and Guideline Statements Hollywood Police 9.25% 9% Fire 7.5% - 8% (Plans are now frozen for (Plans are now frozen and new General Fund Employees and plans with lower benefits became new plans with lower benefits effective 10/1/11) became effective 10/1/11) North Miami 11.51 % or 9.51 % 7% North Miami Beach 12% 7% Pompano 11.6% Tier 1 10% ' Tier 2 7% Tamarac 9% 7 % FRS 3% 3% (Includes Coconut Creek, Cooper'City, Miami Gardens, Miami -Dade County, Miami Lakes, Pinecrest and Wilton Manors) Note: Employees in Social Security also contribute .to Social Security. 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